Let's hope March comes in like a lion and keeps roaring through June. Otherwise it could prove problematic for Gov. Mike Parson's budget.
Parson's proposed budget that would take effect July 1 will spend $400 million of an expected $516 million surplus when the current fiscal year ends. The $30.1 billion overall spending plan is based on expectations that general revenue will increase 1.7 percent this year. It then forecasts 2 percent growth during the 2020 fiscal year, ending with a $116 million surplus.
But if this year's revenue forecast comes up short, it's even more likely next year's projection will, too.
March is key because that's when Missourians who owe state taxes will begin making payments and general revenue coffers will see a surge of money. But March could be less of a surge and more of a flutter through the end of the fiscal year.
Yet to be seen is how the impact of Missouri's state income tax withholding error will play out. The error first attracted major headlines in November when revenue collection fell way short compared to November 2017. The under-publicized tax withholding error was to blame.
Lawmakers are proposing a plan that would allow taxpayers who owe the state to extend the April payment deadline into June without accruing penalties because of the Missouri Department of Revenue's gaffe. We hope this idea gains traction. It only seems fair considering the state created this mess and hundreds of thousands of Missourians will pay for it, figuratively and literally. The state should still be able to collect what is owed before the fiscal year ends.
Parson's budget is ambitious, calling for an extra $61.4 million for K-12 education, $10 million more for transportation reimbursements to those same schools, and an added $30 million for state workers to receive a cost-of-living increase.
Higher education isn't getting an increase under the current plan, but it's not having funds taken away, either. Some may view that as a victory, of sorts.
If revenue projections come up short, higher ed may get the ax, and if that happens University of Missouri officials will be sent scrambling late in the fiscal year to figure out how to make up for the difference.
One way would be to enact more cuts. The other would be to invoke a new state law allowing tuition increases to exceed inflation when the state cuts funding. The difficulty there, however, is that UM wants to increase enrollment and a large tuition increase could stunt that growth.
Parson's proposal will evolve as it works its way through the House, Senate, and then a conference committee made up of both bodies. Each will shuffle money around based on their priorities, so everything Parson wants could change. Regardless, we expect the budget process to be smoother this year than last, when friction between lawmakers and then-Gov. Eric Greitens was apparent from the start of the legislative session.
Parson, a former state lawmaker, has more experience than his predecessor when it comes to diplomacy. He's already ahead of Greitens by not burning bridges among his own party. But if revenue projections come up short it won't really matter, and the final weeks of the session will be focused on whose budget gets put on the chopping block and by how much.
– Columbia Daily Tribune