Missouri Gov. Parson cutting $180 million from budget. Colleges taking biggest hit.
Gov. Mike Parson is reducing funding to Missouri’s public universities and community colleges by around $80 million in response to budget constraints brought on by the COVID-19 pandemic.
The biggest cuts hit Missouri’s four-year colleges, which could see spending reduced by around $61 million. Community colleges are not spared, with their budgets cut by around $11 million.
Parson is also calling for $54 million to be taken out of the facilities maintenance fund; $12 million from a fund intended for drinking water and wastewater infrastructure, and $6.4 million to promote tourism.
All told, reductions to the budget for the fiscal year that ends June 30 are around $180 million. Parson could restore the cuts if revenue becomes available.
“These restrictions are absolutely necessary,” Parson said Wednesday.
The withholds were needed to balance the FY2020 budget after the COVID-19 outbreak derailed the national and state economy. Further complicating the state’s finances is the decision by the federal government to push the income tax deadline to July, preventing Missouri from collecting much of that tax revenue until next fiscal year.
The governor said the COVID-19’s impact on state revenue mean the budget faces a $500 million shortfall between now and June 30. He said he’s hopeful federal funding will help with that shortall, but “in the future, we may have to restrict even more funding, depending on how extreme the impacts of COVID-19 on the economy becomes.”
Rep. Kip Kendrick, a Columbia Democrat and ranking member of the House budget committee, said the withholdings in higher education are especially difficult this late in the fiscal year.
“I haven’t spoken directly to any of the institutions likely affected by the withholds but, you’d have to assume that they’re looking at a variety of difficult decisions likely including up to furloughs at this point to balance their budgets,” Kendrick said.
“This late next fiscal year, so many of those expenditures have already been made and so much of that money is already out the door,” Kendrick said. “Withholds this late in the fiscal year become that much more difficult to try and find the money to free up money elsewhere to ensure that you have a balanced budget.”
University of Missouri System President Mun Choi said in a statement that the state is working hard to prioritize its resources, and “we must all work together to get past this crisis.” He estimated the cuts will cost the UM System $36.5 million.
“Our goal is to ensure the long-term viability and mission of the university,” he said. “To that end, we expect to make additional difficult decisions in the future.”
Clif Smart, President of Missouri State University, said in a statement that the school will adjust to the revised financial picture.
“We appreciate the hard decisions that the governor had to make,” Smart said. “We are committed to managing the withhold through spending reductions which are already underway, postponing maintenance work, freezing hiring, closing buildings and reducing personnel costs. “
Money from federal legislation recently approved by Congress — more specifically The Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Families First bill — might alleviate some of the cuts. However, since states haven’t received guidance from the federal government on how that money can be spent, Kendrick said the likelihood of that is unknown.
“It’s not like that money just magically appears in the state coffers and we can spend it however we want,” Kendrick said. “Rather, that money is going to have strings attached and those different pots of money are going to have different strings attached to them and different guidance on how that money flows to your state.”
Lawmakers are scheduled to return to the Capitol next week to approve the supplemental budget that will allow the governor to spend federal stimulus money.
The Missouri Budget Project, a left-leaning policy think tank, estimated the CARES Act could mean around $2.38 billion in federal aid to Missouri for use in calendar year 2020. Higher education institutions, St. Louis County and Jackson County will also receive direct federal funding.
“Stimulus money can help our state maintain the health, child care, and economic assistance that families need to stay afloat,” said Amy Blouin, president and CEO of Missouri Budget Project.
Mara’ Rose Williams contributed to this story.
This story was originally published April 1, 2020 at 12:23 PM.
