Governor announces withholds from FY18 budget, adding to cuts

At the signing of the FY 2018 budget last month, Governor Eric Greitens announced that low tax receipts and rising health care costs meant the state would have to withhold $250 million from the newly approved budget.

The withholds, which amount to $24 million for higher education, are in addition to the 6.5 percent cuts approved by the legislature in May. All told, the reduction to higher education amounts to 9 percent, which is what the Governor first proposed in January.

“We were sent here to make tough decisions. That's what we're doing. Politicians were trying to spend money we don't have. So we're left with two choices: raise taxes or cut spending. I will not raise your taxes,” Governor Eric Greitens said in a press release.

There is still a chance that revenue will outpace projections, in which case the Governor could release the withheld funds, dropping the cuts back down to the 6.5% approved by the legislature.

Just days after the Governor’s announcement, State Budget Director Dan Haug announced that 2017 fiscal year-to-date net general revenue collections increased 2.6 percent compared to 2016, from $8.79 billion last year to $9.02 billion.

Just because revenue is netting positive, it doesn’t mean the Governor will have funds available to release. Legislators built this year's budget assuming a 3.4 percent growth in revenue, but they also had to take into account rising costs and possible tax cuts.

The growth in FY2017 revenue reported by Budget Director Haug could trigger tax cuts approved by the legislature in 2014. If the cuts are triggered, the personal income tax rate for most Missourians will drop from 6 percent to 5.9 percent, and there will be a new 25 percent deduction on business income reported.

Budget Chairman Scott Fitzpatrick was quoted by news outlets this month saying it’s likely the tax cuts were triggered, but the Office of Administration has yet to officially release any confirmation.

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Comments on "Governor announces withholds from FY18 budget, adding to cuts"

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Gina Frakes - Friday, July 28, 2017
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I work for a Community College, and have 2 Associate Degrees from a community college. My Mother went to the same college and earned an Associate degree in Nursing "RN". My daughter is attending the same community college and is wanting to earn a A.A.S.Physical Therapy Assistant degree.. I was hoping my 3 granddaughters will eventually attend college as well. Cutting Community College budgets not only hurts those individuals like myself, it also hurts the students who are attending now, and the students of the future. G.Frakes

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