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State revenue shortfall could lead to new cuts in state universities

November 18, 2002
By: Jason McLure
State Capital Bureau

JEFFERSON CITY - A state revenue shortfall of more than $100 million will likely lead to further cuts in funding for higher education, according to the state budget director.

The $102 million shortfall through the first four months of the 2003 fiscal year bodes ill for the University of Missouri system, already reeling from a 10 percent budget cut from last year. The University of Missouri-Columbia also had $48 million withheld from its budget in May.

Budget director Linda Luebbering said the state will try to save money in a number of areas, but that the state's universities would be among the first areas to take further cuts.

She said the state is taking steps to cut administrative costs in every department, from agriculture to transportation to health.

"Department directors have already been leaving vacancies open, reducing their travel expenses and doing as many things as they can administratively to control costs within their budgets," she said.

Rep. Carl Bearden, R-St. Charles, who has been nominated to chair the House appropriations committee, said he was hopeful the economy would gather speed and cuts limited solely to administration and travel.

"I'd rather put the squeeze on those before we put the squeeze on Higher Ed or other areas," he said.

But Luebbering was not so optimisitic. She said she expected the revenue shortfall to grow between now and the end of the year. And despite recent cuts, higher education remains among the most convenient areas for the state to withhold funding.

Joe Moore, spokesman for the UM system, said he hoped the governor would see the university has already absorbed a round of deep cuts, and would look elsewhere for savings.

But Moore admitted there was little to guarantee further withholdings weren't forthcoming.

Budget director Luebbering said the state has a limited number of options when making general revenue cuts.

Accounting for nearly 40 percent of the state's general revenue budget is funding for elementary and high schools, which enjoyed a six percent boost in state funding this year. But deep cuts there are not likely because that has been a top priority of the governor.

"K through 12 will be the last place we go, if we even talk about going there," Luebbering said.

Missouri's prison system and Medicaid also take up a significant portion of the state's budget, but Luebbering said those areas are more difficult to cut. She said funding for the corrections department is tied to the number of prisoners in the system. Short of releasing prisoners, it would be difficult to glean short-term cuts from this area.

The state also has limited flexibility in cutting Medicaid, since much of the money budgeted for that is mandated by the federal government.

This leaves the university system and the state's elementary and secondary schools as the only significant possible source of savings.

Luebbering said when the state revises its revenue forecasts in December, it will announce which departments will be subject to withholdings and the exact details of what those cuts will be.