JEFFERSON CITY – Missouri Gov. Jay Nixon announced an additional $35 million in spending cuts Tuesday for public schools and universities, citing concerns about declining state revenues from lottery sales and casino taxes.
The latest spending reductions come just as schools are wrapping up their academic year, meaning there is unlikely to be an immediate effect on classrooms. But some school districts might have to dip into reserves to make it through the fiscal year that ends June 30.
"It's going to force a lot of school boards and superintendents to do some scrambling here toward the end of the fiscal year to make some budget adjustments," said Brent Ghan, a spokesman for the Missouri School Boards' Association.
The spending cuts come on top of $22 million of education budget restrictions that Nixon announced in April, also as a result of declining lottery and casino revenues. Because gambling proceeds are earmarked for education, the cuts must come from that area when revenues fall short, Nixon said.
Missouri' K-12 school funding formula will lose $24.6 million in the latest round of cuts, raising the total cut to more than $40 million this year. Universities will lose an additional $10.5 million, raising the total higher education reduction to nearly $17 million.
The Missouri Gaming Association has attributed part of the decline in casino revenues to a cold and snowy winter and the lingering effects of the recent economic recession. Increased competition from a new casino in Kansas City, Kansas, also could play a role, as could a change of ownership at a St. Louis casino.
Nixon's budget director, Linda Luebbering, said the reason for the slumping lottery revenues "is a little bit less known" but could depend partly on the number of large jackpots that can spur a surge in ticket sales.
Officials at the Missouri Lottery did not immediately return telephone messages Tuesday.
This year's state budget needed nearly $343 million from casino revenues and almost $312 million from lottery proceeds to meet its education appropriations. That would have amounted to a 4.2 percent growth for casino revenues and a 7.9 percent growth in lottery proceeds compared with the previous year.
But the state is now expected to receive $309 million from casino revenues and $275 million in lottery proceeds, according to projections released Tuesday by Luebbering. That would equal a 6 percent decline in casino revenues and a 4.9 percent reduction in lottery revenues compared with the previous year.
Nixon said he's concerned the financial problems could continue into the next fiscal year, because the Legislature assumed a larger casino revenue figure than he had recommended for the 2015 budget.