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Missouri Budget Update - Moarchive.oa.mo.gov/bp/pdffiles/2011_budget_update.pdf · General Assembly...
Transcript of Missouri Budget Update - Moarchive.oa.mo.gov/bp/pdffiles/2011_budget_update.pdf · General Assembly...
Missouri
Budget Update
August 2011
Missouri Division of Budget and Planning
MISSOURI BUDGET UPDATE
August 2011
Economic Data – Actual & Projected
State revenue update.
State spending update.
What’s ahead for FY 2012 and FY 2013.
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MISSOURI BUDGET UPDATE
August 2011
Economic Data – Actual & Projected
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Personal Income growth has accelerated over the last five quarters, but
growth in Wages & Salaries has been slower to recover.
Near-term increases in Personal Income will be in the same modest range
as recent data until the employment level consistently increases, which is
more likely in Calendar Year 2012.
(10%)
(8%)
(6%)
(4%)
(2%)
0%
2%
4%
6%
8%
200
6q
3
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7q1
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7q3
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8q
1
200
8q
3
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9q
1
200
9q
3
2010
q1
2010
q3
2011q
1
2011q
3
2012q
1
2012q
3
2013q
1
Growth in MO Personal Income Q/(Q-4)
Personal Income
Wages & Salaries
4
5
(8%)
(6%)
(4%)
(2%)
0%
2%
4%
Jan-0
7
Ap
r-07
Jul-0
7
Oct-0
7
Jan-0
8
Ap
r-08
Jul-0
8
Oct-0
8
Jan-0
9
Ap
r-09
Jul-0
9
Oct-0
9
Jan-10
Ap
r-10
Jul-10
Oct-10
Jan-11
Ap
r-11 Change in US Total Industrial Output
Over Previous Three Months
Industrial Production has slowed in the past three months. Inventories of
manufacturers and retailers have increased relative to sales, leading to
fewer orders.
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4%
5%
6%
7%
8%
9%
10%
11%
200
7q1
200
7q3
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8q
1
200
8q
3
200
9q
1
200
9q
3
2010
q1
2010
q3
2011q
1
2011q
3
2012q
1
2012q
3
2013q
1
2013q
3
US & MO Unemployment Rates Seasonally Adjusted Data
US
MO
US Unemployment is expected to remain high, though decline slightly,
through 2012.
In general, the unemployment rate in MO follows the national trend.
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(2%)
(1%)
0%
1%
2%
3%
4%
5%
6%
200
7q1
200
7q3
200
8q
1
200
8q
3
200
9q
1
200
9q
3
2010
q1
2010
q3
2011q
1
2011q
3
2012q
1
2012q
3
2013q
1
2013q
3
Inflation (CPI) Q/(Q-4)
CPI
Core CPI
The lack of consumption or wage growth is keeping inflation subdued,
despite the impacts of high gasoline prices earlier this year.
There is some evidence that higher energy prices may impact “core”
inflation, the statistic that monetary policy makers generally emphasize.
MISSOURI BUDGET UPDATE
August 2011
STATE REVENUE UPDATE
Sources of general revenue.
General revenue projections.
Federal stabilization & relief funds.
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Total $7,176.2
FY 2011 NET GENERAL REVENUE COLLECTIONS ($ in millions)
Individual Income,
$4,640.3, 65%
Sales, $1,759.8, 24%
Corporate, $385.5, 5%
County Foreign, $193.3, 3%
All Other, $197.3, 3%
NET GENERAL REVENUE COLLECTIONS ($s in millions)
5,210
1,931
459 186 218
8,004
4,434
1,732
288 177 144
6,775
4,815
1,823
331 186 141
7,295
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Individual Sales Corporate CF Ins All Other Total
FY 08 FY 09 FY 10 FY 11 FY 12 Est
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REVENUE COLLECTIONS
HOW ARE WE DOING?
Consensus forecast for FY12 would require growth of about 2%
above FY11 actual collections.
Positive signs are seen in withholding taxes, biggest source of state’s
income. Growth in FY11 was 2.5%.
Sales tax collections continue to be stagnant with growth of only
0.3% for FY11.
Lottery and Gaming revenues projected to fall short.
Hurdles: high unemployment rate; continuing housing market flux;
European debt crisis; continuing federal budget saga.
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FEDERAL STABILIZATION FUNDS ($s in millions)
FY 09 FY 10 FY 11 FY 12 Total Resources
Enhanced FMAP $432.1 $702.8 $638.0 $0.0 $1,772.9
Education $0.0 $753.2 $0.0 $0.0 $753.2
General Purpose $0.0 $167.6 $0.0 $0.0 $167.6
Education Jobs $0.0 $0.0 $189.7 $0.0 $189.7
Total $432.1 $1,623.6 $827.7 $0.0 $2,883.4
Estimated
Expenditures
Enhanced FMAP $255.8 $611.7 $595.9 $309.5 $1,772.9
Education $0.0 $530.0 $158.3 $64.9 $753.2
General Purpose $0.0 $88.5 $75.5 $3.6 $167.6
Education Jobs $0.0 $0.0 $189.7 $0.0 $189.7
Total $255.8 $1,230.2 $1,019.4 $378.0 $2,883.4
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MISSOURI BUDGET UPDATE
August 2011
STATE SPENDING UPDATE
State spending pie.
Operating budget summary.
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All Other
$949
12%
Higher Education
$790
10% Judiciary, Elected Officials, &
General Assembly
$275
4%
Elementary & Secondary
Education
$2,813
36%
Corrections & Public Safety
$632
8%
Human Services
$2,384
30%
Total $7,843
FY 2012 General Revenue Available Spending Includes Federal Stabilization Funds ($ in millions)
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FY 2009-2012 OPERATING BUDGET
($s in millions)
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FY 2009 FY 2010 FY 2011 FY 2012 FY 2012
Expenditures Expenditures Expenditures Budget Available
Total Operating Budget
General Revenue $ 8,380.1 $ 7,530.3 $ 7,582.5 $ 7,897.5 $ 7,774.8
Federal Funds 6,264.9 6,818.0 6,809.3 7,470.7 7,468.2
Federal Stabilization 0.0 811.4 419.9 64.9 68.5
Other Funds 7,465.2 7,458.9 7,709.1 7,800.2 7,773.6
Total $ 22,110.1 $ 22,618.6 $ 22,520.8 $ 23,233.3 $ 23,085.1
MISSOURI BUDGET UPDATE
August 2011
FY 2012 and FY 2013 BUDGET
What’s Ahead?
How Do We Make It Work?
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FY 2012 AND FY 2013 BUDGETS
WHAT’S AHEAD?
Hopeful that revenue will remain on track with consensus forecast.
Continuing economic situation adds uncertainty.
Gaming and lottery funds projected to fall below appropriations.
Recovering and rebuilding from multiple disasters will require
significant investment from the state.
Federal budget negotiations could lead to significant reductions in
federal funds for state programs.
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FY 2012 AND FY 2013 BUDGETS
WHAT’S AHEAD? (continued)
Over $400 million in one-time revenue sources in
FY2012 budget will not be available in FY13.
Continued improvement in economy should lead to better
revenue numbers for FY13.
Health care cost increases will continue to impact budget.
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FY 2013 BUDGET
HOW DO WE MAKE IT WORK?
More people working in good jobs!
More focused use of tax credits.
- Discussion on special session could lead to long term solution.
Improved collections of existing taxes.
- Legislation did not pass in 2011 regular session, some discussion for
inclusion in special session.
Reduced spending.
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MISSOURI BUDGET UPDATE
August 2011 Summary
State revenue update – on track for FY12. Positive signs
in individual income tax; but some hurdles.
Anticipating continued revenue improvement in FY12 and
FY13. Some sources (gaming and lottery) may be down.
What’s ahead for FY12 & 13 – funding disaster recovery.
Phase out of one-time sources creates challenges.
To balance budget – better jobs tools, continued
spending review, tax credit reform, improved collection of
existing taxes.
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