Washington, DC 20002
Iris J. Lav
Board of Directors
David de Ferranti, Chair
John R. Kramer, Vice Chair
Henry J. Aaron
Barbara B. Blum
Marian Wright Edelman
James O. Gibson
Beatrix Hamburg, M.D.
Richard P. Nathan
Robert D. Reischauer
Juan Sepulveda, Jr.
William Julius Wilson
MISSOURI BUDGET SQUEEZED BY FEDERAL POLICIES
Federal policies that impose new costs on Missouri and restrict state revenues have been a major contributor to the state’s recent fiscal crisis and are likely to cost Missouri more than $1 billion per year over the next several years, according to a report issued today by the Center on Budget and Policy Priorities and the St. Louis-based Missouri Budget Project.
“These harmful federal policies have forced Missouri to impose bigger budget cuts over the past few years than would otherwise have been needed to deal with the fiscal fallout of the economic downturn,” said Nicholas Johnson, director of the Center’s State Fiscal Project and a co-author of the report. “And because those federal policies are ongoing, they will continue to make it harder for the state to provide residents with the services they need.”
State Budget Cuts Harming Tens of Thousands of Missourians
The report is
a case study of how certain federal tax and budget policies that exacerbate
state budget problems are affecting families and communities across the
country. As a result of the budget cuts
Also, some 88,000 Missouri families with children attending state colleges and universities are paying higher tuition — up to $630 more per year at two-year colleges and up to $1,743 more per year at four-year colleges — and property owners and renters in roughly one-fifth of the state are facing higher property taxes, as school districts seek to offset substantial losses of state aid.
pursuing more equitable policies toward
“In essence, lower- and middle-income Missourians have been paying for very generous federal tax cuts for the highest-income Americans and will continue to do so unless federal policies are changed,” Johnson said.
Only Three States Hit Harder by Federal Policies
In fiscal years 2002 through 2005, federal
Federal policies are imposing two broad types of costs on states:
For Many, Pain of State Budget Cuts Outweighs Gain of Federal Tax Cuts
To cope with the fiscal effects of these
harmful federal policies and the recent economic downturn,
In fact, for
many lower- and middle-income Missourians, the costs of the state’s
belt-tightening measures outweigh the benefits of the federal tax cuts
enacted since 2001. For example, the average federal tax cut in 2004 for
taxpayers in the middle fifth of the income spectrum ($846) is only half
of the average tuition increase for a
The Center on
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The Center on Budget and Policy Priorities is a nonprofit, nonpartisan research organization and policy institute that conducts research and analysis on a range of government policies and programs. It is supported primarily by foundation grants.
The Missouri Budget Project is a statewide nonpartisan, nonprofit organization that analyzes and informs the public about Missouri budgetary and fiscal policy options.