Dear Citizens: Members of the House and Senate have given final approval to a balanced state spending plan for the upcoming fiscal year that begins July 1. The House and Senate had each approved versions of the budget since returning to the Capitol on April 27, but were able to conference to reach agreement on an operating budget that was approved by the constitutional deadline of Friday, May 8.
Lawmakers had returned to the Capitol with the knowledge that the state’s economy was declining because of the COVID-19 pandemic. Data released Thursday shows April revenue collections for the current year have dropped more than 54 percent compared to April of last year. While much of this is due to the tax filing deadline being moved from April to July, the state overall has seen a revenue drop of 6 percent for the current year compared to the same time in 2019. The state budget director compared the state’s revenue decline to a faucet being turned off.
Budget leaders worked together to determine that approximately $700 million would need to be trimmed from the proposed budget offered by the governor in January. The House and Senate opted to take the bulk of those savings by eliminating new decision items that had been recommended before the pandemic. This approach allowed lawmakers to balance the budget with a minimal impact to existing state services.
The final version of the FY 2021 state spending plan keeps funding for K-12 education almost entirely preserved at its current funding level in the Fiscal Year 2020 budget. Colleges and universities also have a path to avoid spending cuts if federal funds related to the pandemic are triggered as expected this summer. Budget negotiators also prioritized additional dollars to ensure stable funding for the state’s community colleges.
The budget approved by both chambers also provides additional spending flexibility for the governor if federal funds become available. The plan authorizes up to an additional $2 billion in spending authority for K-12 public schools should additional federal funds become available to support education. Additionally, it authorizes another $54.6 million in funding from the federal CARES Act for emergency education relief funds. The funds can be used for K-12 education, higher education, or any combination of the two the governor may choose. The budget also includes another $304 million in spending authority for the governor for public two-year and four-year institutions should federal funds become available to support them.
In total, the General Assembly has appropriated $35,291,459,657:
- $10,011,743,473 in General Revenue
- $14,757,315,949 in Federal Funds
- $10,522,400,235 in Other Funds
The appropriations bills that make up the FY 2021 state operating budget now move to the governor’s desk to be signed into law.
General Assembly Gives Final Approval to Legislation to Exempt Stimulus Payments from State Income Tax (SB 676) – House members took action this week to ensure the federal stimulus payments received by Missouri residents are exempt from state income tax. The provision is part of a larger Senate measure dealing with important property tax reforms.
The sponsor of the provision said the goal is to protect everyone’s stimulus payments from Missouri income tax. The stimulus payments are not subject to federal income taxes, and the change approved by the House would enact a similar policy for Missouri tax law.
The sponsor said, “That’s $50 to every constituent in your district that received a stimulus payment.”
The changes made by the House then went back to the Senate, which gave the measure unanimous approval. The bill now moves to the governor to be signed into law.
Contact my office at 573-751-5388 or e-mail at Patricia.Pike@house.mo.gov for more information on legislative topics or assistance on state issues, flags, and resolutions. Our office (Room 404) is open Monday through Thursday from 8:00 a.m. to 6:00 p.m. year-round in Jefferson City, MO.
