As we emerge from the initial stages of the coronavirus pandemic, every state and local government, including our own, has begun to survey the economic damage caused by weeks of …
As we emerge from the initial stages of the coronavirus pandemic, every state and local government, including our own, has begun to survey the economic damage caused by weeks of shutdowns.
Although the shutdowns prevented a dangerously overwhelming surge of infections, they forced the economy to temporarily grind to a halt — affecting everything from paychecks and tax collections to housing and utility costs…the disruptions span the entire economic spectrum.
Though Missouri’s 2020 fiscal year ended in June, the annual April 15 income tax deadline was pushed back to July 15. This temporary change means that not all Missourians have paid their income taxes and won’t be paying them until the 2021 fiscal year, which began in July. With that said, I believe state and local governments now face a substantial funding gap until taxes roll in and the economy begins operating as close to normal as is possible.
Over the past few months, Missouri’s general revenue shortfall alone stands at more than $863 million.
In order to maintain a constitutionally balanced budget, the governor has withheld nearly half a billion dollars that would have been spent in the 2021 state budget. Withholds were made across the entire budget to avoid catastrophic cuts to major programs and government functions.
The areas that saw the largest restrictions were capital improvement projects, state IT upgrades, tourism, colleges and universities and the K-12 foundation funding formula. In spite of those cuts, approximately 28 percent of Missouri’s entire $35 billion budget will go toward K-12 schools and public higher education and approximately 42 percent will be spent on social services, health and senior services and mental health programs.
Americans and Missourians alike have faced significant challenges before, and I am confident we will come together to successfully overcome this pandemic. The 2021 state budget will remain a moving target for the foreseeable future — there may be additional cuts, but there is also the possibility of restoring funds as economic prospects continue to improve.
As we move forward, it’s incumbent on all of us to act with caution and respect towards others — our economy is counting on it.
It is, of course, an honor to serve you and your families during this time. If you need assistance or have questions about navigating emergency aid programs, please let my office know and we will do everything we can to help.
(Dave Schatz, a Republican from Sullivan, is president pro tem of the Missouri Senate).