Missouri lawmakers on Friday will get their first look at how much they will be expected to cut from the state budget as state revenues turned negative for the year and Republicans in Washington said they aren’t willing to help states cover their bills.
The COVID-19-caused recession is expected to result in cuts of at least $700 million from the almost $10 billion in general revenue spending proposed by Gov. Mike Parson in January when the state anticipated growing revenues for the year.
State Rep. Kip Kendrick, D-Columbia, the ranking Democrat on the House Budget Committee, said the full proposal will be available Friday for debate in the House next week.
The cuts will likely fall heavily on higher education and perhaps on public schools as well, he said.
The University of Missouri is already planning for layoffs, a 12.5 percent cut in operational spending and has cut salaries of top administrators. University leaders are uncertain whether they can make up the shortfall from tuition because it would mean increasing rates at a time when fall enrollment is already uncertain.
Parson has withheld more than $215 million from state spending in the current year and those cuts are likely to continue in the coming year, Kendrick said. Those cuts include $36.5 million withheld from state support for the UM System.
"The cuts will be difficult to make and they will be painful," Kendrick said. "The cuts are going to come on top of withholds made very late in the fiscal year."
One of the key budget issues is how much income tax will come in during the coming year, which will depend on how quickly the economy recovers.
Nearly 60,000 more Missouri workers filed initial unemployment claims last week amid the ongoing coronavirus crisis, according to data released Thursday by the Missouri Department of Labor and Industrial Relations.
All told, 388,479 workers have filed claims since the week ending March 21, when social distancing restrictions became more common in an effort to slow the spread of the coronavirus.
The state’s daily revenue report through Wednesday shows income tax receipts are off 52 percent for the month and the year-to-date totals, which had remained in positive territory, now show general revenue has declined 0.3 percent for the fiscal year that began July 1.
Also on Thursday, the daily report of new coronavirus infections in Missouri was below 200 for the fifth consecutive day. The Department of Health and Human Services reported 184 new cases of COVID-19, bringing the total since the first case was discovered March 7 to 6,321.
While the largest number of new cases continues to be in the St. Louis area, the outbreak in Saline County around two food processing plants gave that county the largest percentage increase in cases reported by the state. There were 26 new cases reported, an increase of 47 percent. but the total of 81 is still 30 below the 111 cases reported by Fitzgibbon Hospital in Marshall.
The decisions on budget cuts comes as the state received guidance Thursday for how it is expected to spend $2.1 billion in federal COVID-19 relief funds. While the money can cover extraordinary expenses, such as overtime and medical care, it can’t be used to cover day-to-day operations.
"Funds may not be used to fill shortfalls in government revenue to cover expenditures that would not otherwise qualify under the statute," the guidance states. "Although a broad range of uses is allowed, revenue replacement is not a permissible use of Fund payments."
Senate Majority Leader Mitch McConnell of Kentucky, speaking on a radio show Wednesday, said he does not favor a federal bailout of state and local governments.
"I would certainly be in favor of allowing states to use the bankruptcy route," McConnell said. "It saves some cities. And there’s no good reason for it not to be available."
And in a telephone news conference Thursday, U.S. Rep. Vicky Hartzler, R-Harrisonville, said she also does not support help for states.
"I think that is going to be very difficult in that we're already at $2 or $3 trillion that we have spent and the funding needs to go to the expenses to battle this crisis," Hartzler said.
State Senate Majority Leader Caleb Rowden, R-Columbia, said that while he agrees that states have different needs, the states need to work together to make the case for aid from Washington.
"I think in an ideal world if the states were all rowing in the same direction that would be helpful," Rowden said.
He said he understands that McConnell doesn’t want to use federal aid to solve every state’s financial issues but that some help is needed.
"There are going to be states that are going to ask for and are going to need a heck of a lot more than we do," Rowden said.
The states are an essential part of the national economy, Kendrick said.
"If we don’t deficit spend to assist states in this crisis, we are going to set up a longer-term recession," he said.
Parson, however, on Thursday said he didn’t want a federal aid package for state budgets.
"If the question is do I believe the federal government should bail the states out, I do not," Parson said during a Jefferson City news conference.
The federal support for COVID-19 response is welcome, Parson said. And if the federal government is going to spend a large amount on other needs, he said, money that would create jobs would be most welcome.
"I would much rather see an infrastructure bill on the federal level than I would them just giving us money," Parson said.
Parson on Thursday also said he will provide details Monday on the plan for easing restrictions after the state stay-at-home order ends.
The easing of stay-at-home limitations gained steam in some parts of the state. Boone County released the order extending its stay-at-home order until May 3, aligning the county with the expiration of the state order issued by Parson.
And Clay and Cass counties near Kansas City announced Wednesday that their stay-at-home orders will also expire May 3. The decision in Clay County was surprising because just a week ago, the county had extended its order until May 15 to coincide with extensions for Kansas City and Jackson County.
Over the past week, new information has emerged showing a relatively low number of new cases, while access to testing has improved significantly, Clay County said in a news release.
The state health department reported another 10 deaths Thursday, bringing the state total to 218. Deaths have been reported in 31 counties, with a death in Pemiscot County increasing the list where deaths have been reported.
The Columbia-Boone County Health Department recorded two new cases Thursday, bringing the local count of infections to 92. University of Missouri Hospital reported it had three inpatient cases and there is one at Boone Hospital Center. MU Hospital reported two inpatient cases under investigation.
The state health department count for Boone County was 98 on Thursday. The state has slightly different rules for classifying who is a resident of Boone County while counting cases.
As of Thursday, there was least one confirmed COVID-19 infection in 99 of the 117 local health department jurisdictions that report to the state.
The count in Greene County stood at 82, down one from Wednesday.
As of Thursday afternoon , the U.S. had more than 856,000 confirmed cases of the coronavirus, up about 10,000 since Wednesday.
The contagion is blamed for 47,272 deaths in the United States.
Worldwide, the virus is known to have infected almost 2.7 million people and is blamed for more than 187,330 deaths.
The Associated Press contributed to this report.
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