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Federal funds will help cut 2012 budget shortfall in Missouri

By   /   August 11, 2010  /   4 Comments

The approved federal measure to send $26 billion to states will help close the budget gap for Missouri in fiscal year 2012, Linda Luebbering, state budget director, told Missouri Watchdog on Wednesday.

The state’s Division of Budget and Planning estimates that Missouri will receive $209.3 million in health care resources and $189 million for education from the federal government as part of the new state funding.

The $209.3 million will be spent in fiscal 2012, starting July 1st, 2011, Luebbering said. The state, however, is waiting for guidelines from the federal government and discussions with legislators before deciding to spend the $189 million this fiscal year or next.

The money will help cut a predicted budget shortfall of $600 million in fiscal 2012, Luebbering said. “We know it will help. But it will not fill the entire hole.”

Before this round of federal funds, Missouri Budget Project, a progressive public policy organization, estimated the budget shortfall could reach $1 billion in 2012.

“Although really critical in order to prevent some cuts in the next year, it also feeds our use of one time funding and simply postpones when the billion shortfall will hit,” said Amy Blouin, executive director.

With the new money, Missouri Budget Project is estimating a $681 million shortfall in 2012.

Missouri is using $860 million in federal budget stabilization funds this fiscal year to balance the budget.

“Even though this money comes from the federal government, it still comes from taxpayers,” said Christine Harbin, a research analyst with the Show-Me Institute, a free-market think tank. ”If the federal government is borrowing money, it would have to increase taxes in order to pay back the loan, plus interest.”

By Brian R. Hook, brhook@missouriwatchdog.org, (314) 482-7944

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