Missouri’s Budget Surplus Set to Shrink Dramatically, Lawmakers Urged to Curb Spending
State budget director Dan Haug informed Missouri lawmakers that the once substantial general revenue surplus will plummet from $8 billion to an estimated $600 million by the close of the next fiscal year. Over recent years, the state relied heavily on a surplus driven by skyrocketing tax revenues and federal COVID-19 relief funds, enabling significant budget allocations. However, the anticipated unobligated general revenue balance has now been revised down substantially from an earlier forecast of $1.4 billion.
As lawmakers convene in a special session to discuss a $1.5 billion funding plan for new stadiums for the Kansas City Royals and Chiefs, concerns about fiscal sustainability loom. Haug cautioned against excessive general revenue spending, emphasizing the need for prudent budgeting amid tightening financial conditions.
The state’s approach to managing the surplus previously allowed for various major projects and local priorities, yet Budget Committee Chair Dirk Deaton acknowledged that this might be the last opportunity to utilize the surplus for local needs. Additionally, impending tax cuts and changes in federal support could further reduce future revenues.
While some lawmakers, including Senate Appropriations Committee Chairman Lincoln Hough, dispute Haug’s projections as overly pessimistic, the consensus reflects apprehension about the state’s long-term fiscal health. With elevated costs looming from federal mandates and an uncertain economic outlook, Missouri legislators face tough decisions ahead regarding budget allocations.
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