Auditor: Missouri needs to save more for a recession

(AP) Missouri Auditor Nicole Galloway says the state isn’t saving enough money to avoid having to cut spending or raise taxes if there were a recession.

Galloway released a report Tuesday suggesting lawmakers come up with a way to save more money than is currently allowed by the state constitution to be kept in the Budget Reserve Fund.

The fund was capped at $642 million to start the current fiscal year. That’s because the constitution limits the fund to 7.5% of net general revenue, with a maximum of 10% under special legislative approval.

Galloway pointed to a 2018 study by Moody’s Analytics that estimated Missouri would need about $1.3 billion in reserves to survive a moderate recession without cutting spending or raising taxes, or $2 billion to survive a severe recession.