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Wednesday, Sep. 2, 2015

Budget balanced, but uncertainties remain

Monday, July 1, 2002

JEFFERSON CITY, Mo. -- Officially, Missouri begins its 2003 fiscal year today with a balanced state budget.

But the state's financial plan is far from stable.

Gov. Holden acknowledged as much while signing the $18.9 billion budget last week.

The budget assumes money from several sources that still are uncertain, and doesn't account for some expenses that have arisen.

State budget officials identified about 10 financial uncertainties as Holden signed what he described as a delicately balanced budget. They could have pointed out even more.

Here are a few of them:

Between the time lawmakers passed the budget and Holden signed it, the state Supreme Court ruled that telephone companies were due refunds on sales and use taxes paid on past equipment purchases. The state tax division says the cost to state and local governments could reach $130 million when interest is included. Part of that must come from the state. None of it is included in the budget.

To achieve a balanced budget, officials are assuming the use $50 million in revenue this year from a bond sale against the state's future payments from the national settlement with tobacco companies. If promissory notes cannot be issued by around the end of July, however, the state could have to take money from other parts of the budget to pay current debt.

The budget figures on about $21 million for schools from a new keno-style lottery game. It also assumes the collection of $20 million in overdue taxes from an enticement of a penalty- and interest-free period later this year.

The budget assumes about $127 million in savings though changes in the state Medicaid program. Included in that is $26 million from a preferred prescription drug list, which would require pharmaceutical companies to provide extra rebates to the state for having their products placed on the list. Similar programs in Florida and Michigan are embroiled in legal challenges.

Pending in court is lawsuit seeking payment of nearly $21 million in nursing home grants that Holden withheld in the fiscal 2002 budget. If nursing homes are successful, the money now would have to be paid out of the fiscal 2003 budget.

The budget proposes to use $19 million from a water project loan fund to help pay off state bonds -- a move the federal Environmental Protection Agency says would violate its rules. To avoid a federal fight, Holden says the state will use general revenue to pay the bond debt. That could mean cuts elsewhere in the budget.

A Supreme Court ruling in the middle of the legislative session means Missouri will have to refund around $17 million in taxes to big businesses that should have been allowed to file consolidated tax returns. Like the telephone case, that could mean an increase over the budget's expected tax refunds.

But there are even more uncertainties to which state officials have yet to attach dollar estimates.

For example, a Cole County circuit judge ruled June 24 that psychologists should be able to receive reimbursements under the state's adult Medicaid program just as psychiatrists already do.

The policy change is likely to cost the state money, but officials at the Department of Social Services don't expect to have an estimate until the 2003 fiscal year is under way.


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