Legislature Playing with Fire
Missouri’s general assembly flirted with disaster on this year’s budget. Not only did state lawmakers barely pass the budget before the constitutional deadline, but they also failed to reckon with the serious budgetary woes that lie ahead for our state. Instead, they chose to continue the trend of spending too much money. How much longer can this recklessness continue?
After passing the enormous budget, lawmakers declared mission accomplished. While it is true that the approved total budget will be the first in a decade that is smaller than the previous year’s, that is less of an accomplishment than one might initially think. Missouri’s budget has almost doubled over the past five years, from approximately $27 billion in fiscal year (FY) 2019 to nearly $53 billion today. Going into next year, the federal funds that helped make this budgetary growth possible are drying up, and state tax revenues are expected to stagnate or decline. In other words, due to Missouri’s balanced budget requirement, a smaller budget was all but assured before our elected officials took any action.
What is surprising about the budget is the way state tax dollars are spent. The approved budget calls for approximately $15.3 billion in general revenue spending (the fund where state tax dollars go). To put this number in context, in FY 2019, Missouri only spent $10.8 billion in general revenue, and we’re on track to spend about $15.8 billion this current fiscal year. To make matters worse, we’re only expecting to collect about $13.2 billion in net state tax dollars next year. To put it plainly, we’re planning to spend more than we take in. See the table below.
To spend more than we take in, the legislature will have to pull from reserves to make ends meet. Fortunately, the state does have some money set aside that could be used for this purpose, but using those funds may not be the best idea. The current year’s budget relies on spending down the state’s surplus. Doing so again would leave little excess funds left for future years, which is worrisome considering the financial headwinds our state is facing.
All told, Missouri’s budget for FY 2025, which begins on July 1, 2024, plans to spend about 90% more than the state government did in 2019. This level of spending should not be celebrated and is simply unsustainable. It’s time Missouri’s elected officials stop playing with fire, because it’s state taxpayers who are going to be the ones who ultimately get burned.