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Missouri begins its new fiscal year Wednesday with $448 million in spending restrictions, Gov. Mike Parson announced Tuesday.

Those restrictions mean the state begins its 2021 fiscal year already with a larger budget reduction than the $430 million in cuts seen in fiscal year 2020.

“And we will continue to face budget shortfalls in fiscal year 2021,” Parson said during his briefing.

The budget restrictions affect 150 items in state government. Of those, $123 million in spending was withheld from K-12 education, almost $28 million from four-year higher education institutions and $70 million from the MO HealthNet Pharmacy Program.

It was not immediately clear how much of the almost $28 million in withholdings from higher education applies to the University of Missouri System. In the past, about half of the total higher education cuts have been for the system, according to UM spokesperson Christian Basi.

The system and its four campuses have now seen over $85 million in total budget cuts since March, according to a Tuesday news release.

Parson did approve $10 million in funding for the NextGen Precision Health Institute, UM’s “top priority,” according to the news release. The $220 million research facility is expected to be completed by October 2021.

The state’s FY2021 budget totals $35.3 billion, with an additional $10 billion in general revenue.

Parson said there is a possibility he will be able to release some budget restrictions in the third or fourth quarter of the fiscal year depending on the state’s revenue collections and the ongoing impact of COVID-19.

State revenue from FY2020 finished 7% below the previous year’s revenue. Parson said the state expects to be $1 billion below what it had forecasted in January for the 2020 fiscal year.

On Tuesday, Parson signed the fiscal year 2021 budget bills that were passed by the legislature.

Parson also vetoed 17 items that would have totaled $11 million in spending. The budget restrictions come as COVID-19 has impacted the state and nation’s economies.

“I want to start out by saying that in the 25 years I’ve been working on the state budgets, this is the most difficult budget I’ve seen,” State Budget Director Dan Haug said during the briefing.

Before COVID-19, Parson said the state intended to improve workforce development, infrastructure, state government and investment in public safety.

“Needless to say, when COVID-19 hit Missouri in March, everything changed, including our state budget,” he said.

On June 1, over $209 million was cut from the FY2020 state budget. Of the $209 million budget cut, $131 million was cut from elementary and secondary education, and $41 million was cut from higher education.

An additional $187 million was available to the state via the CARES Act and Elementary and Secondary Emergency Relief Fund.

Galen Bacharier contributed reporting.

This article originally ran on columbiamissourian.com.

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