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story.lead_photo.caption Missouri Budget Director Dan Haug speaks during a news conference Tuesday, June 30, 2020, as Gov. Mike Parson looks on. Photo by Courtesy of Missouri Governor's Office

As the economic fallout of the COVID-19 pandemic continues, Gov. Mike Parson and Missouri's Budget Director Dan Haug announced Tuesday $448 million in budget restrictions for the 2021 fiscal year — which starts today.

The restrictions mean there will not be a 2 percent pay raise for state employees, as had been planned in January, and the likely elimination of approximately 500 state jobs, out of a state workforce of more than 50,000.

Many of the largest single budget hits from restrictions announced Tuesday for Missouri's 2021 budget will affect education, but other big hits will be taken by facilities maintenance, public water infrastructure and equipment purchases — just to name a few of the restrictions on more than 150 budget items.

Haug said about 300 of the 500 state positions to be cut are filled, but he did not immediately have on hand a department-by-department list of the affected positions. He added the budget did not include a reduction in pay for state employees, nor any furloughs.

Elementary and secondary education takes the biggest single hit of restrictions in what was announced Tuesday, with a budget that has more than $123 million less for the state's school aid Foundation Formula.

Other withholds from the Department of Elementary and Secondary Education include more than $2.9 million from sheltered workshops that serve workers with disabilities, $1 million from the Parents as Teachers program, $700,000 from virtual schools and education, $500,000 from basic education for adults, and $300,000 from school safety grants.

The 2021 budget also includes almost $28 million less for Missouri's four-year colleges and universities, and more than $18 million less for community colleges.

State Technical College of Missouri in Linn specifically has $219,665 withheld from it.

"Both the K-12 Foundation Formula and higher education will receive the same amount of money in Fiscal Year '21 as they did in Fiscal Year '20 after the restrictions put in place for Fiscal Year '20," Haug said.

Parson said more than $430 million had been restricted from the state's 2020 budget.

Much of that was also from education.

Parson said state revenues for 2020 were down approximately 7 percent from the year before, almost $1 billion below what had been projected in January.

Parson remained optimistic there may be more economic recovery later this year from the COVID-19 pandemic — enough for the state to possibly restore some of the restricted funds.

He said education funding has some of the largest pools in the state's budget, and he had to go to them for restrictions for this year's budget.

He said he's been in contact with the state's education departments and schools throughout the budget process to give them notice of what was coming.

"As difficult as these decisions are, we are hopeful that the economy will bounce back quickly, and we may be able to release some of these funds as the year goes on," Parson said.

Haug said funds could be released if revenues come in later this year better than expected, but for now, he said the $448 million that's been restricted is sufficient to balance the budget, "based on our most current projections."

He said almost all new spending was removed from the budget.

"We tried to take a more nuanced look. We looked at places where we thought we could get more efficient. We looked at new spending," Haug said of the process of looking at where to place restrictions.

"We tried to take a more surgical approach to it, trying to figure out ways that would have the least impact," he added.

Among the other of the largest single restriction items in next year's budget, $70 million was moved from the MO HealthNet Pharmacy Program to a different fund, the Pharmacy Reimbursement Allowance Fund.

There's $45 million less in facilities maintenance reserve funds, more than $15.1 million taken from bond savings by the Board of Public Buildings, more than $10.5 million restricted from the Multipurpose Water Resource Program, and $10.1 million withheld from expense and equipment purchases across all state departments.

The Multipurpose Water Resources Program funds the planning, design, construction or renovation of public water supplies, flood control storage, drought mitigation, public water supply treatment or transmission facilities projects. It had been listed as a budget priority at the start of the year by Parson.

Other notable budget restrictions among many affect agencies and programs that touch upon the daily lives of Missourians:

More than $9.4 million from Temporary Assistance for Needy Families work programs;

More than $7.8 million from "Developmental Disability Community Programs;"

More than $1.8 million in total from the Missouri Highway Patrol;

More than $349,000 from the Department of Revenue's tax assistance offices.

The withholds from the Highway Patrol are the sum of more than $825,000 in fringe benefits, more than $739,000 for enforcement, $200,000 from the purchase of new vehicles, more than $43,000 for the Missouri Highway Patrol Academy, and $5,000 for the Patrol's Water Patrol Division.

The Missouri attorney general's office's withholds included $150,000 for investigating potentially illegal gaming machines.

Other large restrictions also included more than $8.5 million from the Department of Economic Development's Division of Tourism, more than $4.1 million from the Missouri Department of Transportation for Port Authority capital improvements, and $4 million to replace the state's accounting and budget system.

The full list of 2021 budget restrictions announced Tuesday is available at oa.mo.gov/sites/default/files/FY_2021_Expenditure_Restrictions_July_1_2020.pdf.

The total state budget is approximately $35.3 billion, including $10 billion general revenue, Parson's office said.

This story was updated at 8 p.m. June 30, 2020, with further details.

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