State budget cuts could come soon

JEFFERSON CITY, Mo. -- Economists and budget officials were meeting Thursday to revise the state's revenue projections as Gov. Bob Holden neared a likely announcement about more state budget cuts.

Holden is waiting until the revenue revisions are complete to outline the latest spending cuts, said budget director Linda Luebbering. The revenue revisions could come as soon as Friday, although an announcement on budget cuts has not been scheduled, she said.

Officials said there appeared to be little possibility of avoiding more budget cuts.

Through November, just five months into the current state fiscal year, Missouri's revenues already were $152 million short of its budget. That figure has been expected to double or triple before the 2003 fiscal year ends on June 30.

Former state budget director Jim Moody said Thursday that Missouri's budget situation is so dismal that employee layoffs are likely.

"There is severe financial pressure here and it is my belief that they are going to have to make cuts, and those cuts are going to be imminent," Moody said.

, now a lobbyist, said after delivering a budget primer to new state lawmakers. "Particularly doing it mid-year, it's very likely that, yes, they are going to have to reduce staff."

Each December, the governor's office and Legislature bring together state and private economists and budget officials to consider revising the current year's revenue estimate and to develop a consensus revenue projection for the next budget year.

The state's current budget of $18.9 billion was based on 3.1 percent growth in state general revenues, which comprise about one-third of the total budget.

Moody predicted the forecast would have to be lowered to no growth or a slight decline.

The same thing happened last year. The state had based its fiscal 2002 budget on 5.6 percent growth. During last December's meeting, the forecast was revised to show a slight decline in revenues. But even that turned out to be optimistic.

The state's net general revenues in fiscal 2002 ended up 3.5 percent lower than the previous year.

Moody said the state's budget troubles are due not only to the poor economy but to past decisions by state lawmakers and governors. During the mid-to-late 1990s, the state passed numerous tax cuts while also expanding spending for public schools, prisons and the Medicaid program for the poor and disabled.

Now the state is having trouble paying for all its programs. And lawmakers are prohibited by the constitution from raising taxes more than about $75 million annually without taking the proposals to a statewide vote.

Some newly elected lawmakers, who are wrapping up a three-week orientation session, said Moody's presentation was one of the more sobering ones they had heard.

Elected-Rep. Otto Bean Jr., R-Holcomb, said he was learning that the state's budget problems are more severe than he thought when campaigning.

"We're just going to have to cut spending and prioritize where we spend our money," Bean said. "We're going to have to spend it wisely, and that may be a big question about where to cut."