Shortfall in state budget grows to $100 million

JEFFERSON CITY, Mo. -- Missouri's budget shortfall has grown to more than $100 million and could triple over the next eight months, meaning more spending cuts are likely, the state's budget chief said Tuesday.

The gloomy forecast came as Gov. Bob Holden announced a new series of public meetings around the state later this week and next to discuss government cuts and the elimination of what he considers corporate tax loopholes.

Holden held his first such meeting in mid-September in Jefferson City, when budget officials said Missouri's general revenues already were $70 million behind projections just two months into the 2003 fiscal year.

Now through the end of October, that budget shortfall has grown to $102 million, Holden's budget chief, Linda Luebbering, said Tuesday.

Based on current tax collections and information from national and local economists, state budget officials aren't expecting the economy -- or the state's revenues -- to get any better in the short term.

"We would expect our shortfall to grow from $102 million," Luebbering said. "If I had to look in a crystal ball, I would not be surprised by $300 million by the end of the fiscal year," which is June 30.

That means spending cuts -- withholding state appropriations to agencies -- are "highly likely," Luebbering said.

Any announcement of budget withholdings by Holden is not likely to occur before mid-December, when the state economists are expected to revise their revenue projections for this year and settle on a forecast for Holden and lawmakers to use in crafting the fiscal 2004 budget.

But department directors already are looking for administrative savings.

At this point, Holden has no plan to lay off state employees, Luebbering said. But she did not rule out the possibility.

The state currently is operating under an $18.9 billion budget made up mainly of state and federal money. Because the budget includes several one-time funding sources, Holden has said state would need to find about $500 million for next year's budget just to keep pace with this year's.