The budget analyst for the Jay Nixon transition team says the state faces a $342 million revenue shortfall - in the current budget year.
So, when Nixon takes the governor's office next month, he faces a decision of whether to cut state services, and/or staff.
On election night, Nixon knew he would inherit an economy in recession and a budget in the red.
He moved quickly to appoint retired Senate Appropriations Chairman Wayne Goode to analyze the depth of the budget problem.
Goode says the state probably will end the current fiscal year with about $600 million less in revenue than lawmakers budgeted for in may.
"I'm not pointing any blame at them at all," Goode told reporters during a conference call Tuesday. They were working with the numbers that were as reasonably accurate as any at that time."
But, instead of a couple hundred million in reserve, Nixon faces an immediate shortfall.
"Does that likely mean that there will have to be withholdings?" a reporter asked Goode. "Well, the governor is obviously considering that at this point," Goode replied.
Goode expects Nixon to announce his plans within a few days, after he returns from the governor's conference with the Obama administration in philadelphia. Obama says 41 of the 50 states will have revenue shortfalls in the coming year.
Goode told reporters there are ways to find efficiencies in the budget...in other words, to redirect money to programs like Medicaid.
"Medicaid is a high priority," the former senator reminded everyone.
Goode says the situation is every bit as bad as it was when Bob Holden came into office.
Holden eventually withheld money from education. Thousands of state workers have a more direct concern: Will they lose ther jobs?
Asked if layoffs were possible, Good replied: "Not anticipated at this time."
"Finding efficiencies isn't the same thing as laying off people," Goode said. "And I think one can be done without the other."
The Missouri Republican party issued a statement suggesting Goode's gloomy forecast was calculated to provide cover for Nixon to break campaign promises.