Missouri freezing $180 million in state spending after coronavirus causes budget shortfall

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JEFFERSON CITY, Mo. – Governor Mike Parson warns Missourians about the economic toll COVID-19 is having on the state. During his daily briefing, the governor said the coronavirus could lead to a $500 million budget shortfall for the current fiscal year.

The governor announced he is freezing state spending in several areas adding up to approximately $180 million that will not be going to state agencies and programs.

The spending reductions include a cut in spending for Higher Education and Workforce Development. Other impacted departments include the Department of Transportation, the Office of Administration and the Department of Natural Resources. The governor said the cuts are “absolutely necessary.”

The state does expect to receive an influx of support from emergency federal funding. The governor said he is hopeful that more than $300 million in federal dollars can help make up for some of the budget shortfall. The cuts are being made to not only make up for lost revenue but to also allow the state to purchase more personal protective equipment.

“More people are staying home. Business operations have been limited. Many people have lost their jobs. And state revenues are down. When we began this year, we anticipated economic growth and we had based our budget on that growth. COVID-19 has had serious impacts on our anticipated economic growth. And now we are expecting significant revenue declines, some of which may be larger than those experienced during the great recession,” said Gov. Parson.

The governor continues to stress the need for everyone to stay at home if possible. On Wednesday the Missouri Legislative Black Caucus joined a growing number of groups calling on the governor to immediately issue a statewide stay at home order. Governor Parson continues to say he’s evaluating his decisions daily.

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