Missouri budget director: Economy 'turned off like a faucet'

COLUMBIA, Mo. -- Missouri lawmakers on Thursday agreed to try to spare colleges and universities from budget cuts despite plummeting revenue the state budget director says are unlike anything he's ever seen.

Budget director Dan Haug on Thursday announced net revenue collections dropped more than 54% in April this year compared to April 2019, largely because Tax Day was delayed until July. Overall state revenue decreased more than 6% so far this year compared to the same time last year.

"This is unlike anything I have ever seen," Haug said. "I couldn't even imagine revenues dropping as much as they did. To see the economy turned off like a faucet is incredible."

State lawmakers earlier this year agreed to cut $700 million from Gov. Mike Parson's original budget proposal for the upcoming fiscal year, which was based on rosier revenue projections before the coronavirus pandemic.

House lawmakers had planned on cutting state funding for public higher education by 10% next year in an attempt to balance the budget.

But House and Senate negotiators Thursday scraped together more than $13 million to keep funding for community colleges stable. Lawmakers also agreed to pad the budget with federal dollars so four-year schools will get stable funding if Congress sends the state more financial aid.

The negotiated spending plan still needs to be approved by the full House and Senate.

Lawmakers last week returned to the Capitol after weeks off over concerns about spreading COVID-19 in a rush to pass a budget by their Friday deadline. That entailed completely revamping the budget, although it's unclear whether lawmakers' planned $700 million in cuts will be enough.

Haug said the impact of the coronavirus on the state economy hasn't been fully realized. He said May revenue likely will be a better indication of the state of Missouri's economy after the virus shuttered businesses and spiked unemployment.

Some Democrats had argued for delaying work on the budget until later in hopes of getting a better picture of the state's economy.

The governor is responsible for making further cuts if the state doesn't get enough money to fully fund the budget approved by lawmakers.

The next fiscal year begins July 1.

Also on Thursday, House lawmakers voted in favor of exempting federal stimulus checks sent to individuals from state taxes. If enacted, that would mean Missouri taxpayers would each keep about $50.