Mo. official: $100M to be cut from budget

JEFFERSON CITY, Mo. -- More than $100 million will be cut out of Missouri's budget before it takes effect July 1 because state revenue continues to slide, the governor's budget director said Friday.

Gov. Jay Nixon plans to use line-item vetoes to reduce spending for next year, budget director Linda Luebbering said. He also will delay spending in other some areas that are not vetoed. It's an opening salvo to what Luebbering described as a concerted effort to cut government spending through 2013.

"The governor has to react immediately to get the budget back under control," she said.

Luebbering did not give details on the cuts but said a state bailout of the Metro public transit system in St. Louis, construction at the Bellefontaine Habilitation Center and proven economic development items would be safe.

Missouri budgets run from July 1 through June 30. Lawmakers in May approved a $23 billion operating budget that used federal stimulus money to avoid deep cuts and grow state spending by 3 percent.

The legislature also approved spending $600 million over the next two years on a series of special projects. Those include a new radio system for the Missouri State Highway Patrol to help emergency responders better communicate and college construction projects.

Both the operating budget and the special projects list now are being eyed for cuts because state revenue for the current budget year has declined and budget officials expect next year won't be much better.

Missouri has already cut spending, borrowed from cash reserves and delayed tax refunds this year.

The current budget, created in May 2008, assumed state revenue would increase by 3.4 percent. But by the time Nixon, a Democrat, took office in January, that state's expectations had changed to an anticipated 4 percent drop in revenue. Now, budget officials are expecting a 6.7 percent drop.

If that holds true, it would mean that when the 2009 budget ends June 30, Missouri would have brought in nearly $762 million less than first expected and $536.3 million less than in 2008.

State revenue has declined from the previous year only twice since the 1970s -- in 2002 and 2003 -- Luebbering said. She said Nixon's administration is now planning for another 1 percent drop in the 2010 budget year.