January 12, 2012

The Missouri General Assembly met for their second week of the 2012 legislative session.

Governor Nixon will deliver the annual state of the state address on Tuesday, January 17th at 7pm. In the address the Governor will release his budget and legislative priorities for the year.

The state’s general revenue collections for December 2011 decreased by 2.1 percent compared to December 2010. Sales taxes were 4 percent lower and corporate income tax collections were more than 10 percent lower than they were in the same month last year. The decline results in year to date collections of just 1.18 percent more than the previous year.

The projected budget shortfall is at least $500 million. The legislature seems short on solutions to the budget gap, House Speaker Tilley was clear in his opening speech that the House will not implement the Governor’s plan to tap university reserves to fund higher education.

As a result  to meet the revenue estimate for the current fiscal year, FY 2012, state revenues will need to grow by 4 percent over the next six months. The decline was not anticipated and could result in mid-year budget reductions. In addition, it is likely to compound the shortfall expected for FY 2013 as legislators begin budget negotiations.

Speaker Tilley rejected an increase in the state’s cigarette tax, currently by far the lowest in the nation, he did acknowledge the inequity for Missouri business created by the sales tax loophole on the Internet and catalog sales.

The Legislature is also contemplating use of the Rainy Day Fund to cover costs associated with the natural disasters that took place last year, but the fund would require some reforms for the state to be able to pay back the withdrawal in a reasonable amount of time not the current three years. A public vote on those changes would be required because the Rainy Day Fund provisions are constitutional.

Once again, a House committee heard a constitutional amendment to cap state expenditures at the rate of inflation. Colorado, the only state with a fully operational TABOR has struggled to meet basic state needs such as transportation and education under their funding cap. Colorado later negated the TABOR bill in the state.

House Joint Resolution 43, sponsored by Representative Eric Burlison (R-Springfield), was heard by the House Budget Committee. Public groups testified for the legislation. Former Representative Alan Icet working for the Singqufield group testified in favor of the Act. It differs somewhat from Colorado’s TABOR by utilizing the highest revenue collections for Missouri as a base.

Appropriations

Bert Malone provided testimony urging the Appropriations Committee to maintain funding for local public health.

Stephanie Browning made contact with Chair Senator Schaefer (Columbia) prior to the hearing which was very beneficial.

The House Appropriations Committee may meet next week.

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