Metro's local victory prompts state to cut one-third of its aid
This article first appeared in the St. Louis Beacon, April 22, 2010 - Less than three weeks after St. Louis County voters approved more money for Metro, Missouri is taking back a hefty chunk of its aid.
Gov. Jay Nixon announced today that he has cut $4 million from the $12 million that the Legislature OKed last year as one-time aid to the region's public transit agency, which had slashed services a year ago after area voters rejected in November 2008 a half-cent increase in the sales tax rate.
Voters overwhelmingly approved the hike April 6, which Metro said would result in restoration of many of its service cuts. Agency officials said the governor's action wouldn't affect Metro's plans.
Ironically, Nixon cited Metro's success on April 6 as the reason he was cutting its state aid. That reasoning may anger some Metro allies, who noted during the campaign that most states -- unlike Missouri -- subsidize their urban transit systems.
But Metro chief executive Bob Baer was philosophical in his statement released this afternoon. "While we are disappointed, we are not surprised," he said.
"Metro has closely monitored the budget debates in Jefferson City over the last several months and we have been in discussions with our St. Louis legislative delegation," Baer continued. "We understand that the state’s precarious budget situation has put many important services at risk, and that public transit is among them."
Baer said the agency still plans to restore some services this fall, as additional money comes in from the sales tax increase known as Proposition A.
In the meantime, Metro is considering several options for dealing with the cut in Missouri aid; one of them calls for accepting a $1.8 million offered last year by officials in St. Clair County in Illinois.
In Missouri, Metro's cut was among $45 million in additional state budget cuts for the current fiscal year that Nixon announced today because of the state's continued lower-than-expected income collections. By law, the state must have a balanced budget when its fiscal year ends on June 30.
Others who took a hit:
- Parents as Teachers, a nationally honored pre-school program that already is on the chopping block for the next fiscal year, took a $4.9 million cut today. That's in addition to $2 million trimmed earlier.
- Transportation money for public schools' bus systems was slashed $8 million, which is in addition to $4 million cut earlier.
- Public hospitals, which saw a $2.2 million trim in their Medicaid payments.
Today's cuts were unexpected because Nixon and state Budget Director Linda Luebbering had said several weeks ago that they thought the $900 million that he'd already cut from the current budget would be enough to keep it in balance.
But they apparently were wrong. Luebbering announced that, as of April 20, this month's state revenues are down 19 percent from April 2009 -- a month that also had been down from April 2008.
With just over two months left in the fiscal year, this year's overall state revenue collections are down 13.8 percent -- about twice what the Nixon administration had projected just a few weeks ago.
Luebbering said in today's announcement that the state's money troubles are exacerbated because "the average income tax refund is up nearly 8 percent compared to last year, while the average payment has fallen nearly 30 percent.
"Also, withholding (income tax) and sales taxes remain historically weak," the statement said. "Through March, individual withholding has declined five straight quarters and sales tax has declined 10 straight quarters."
In an interview later, Luebbering said that this fiscal year's final income numbers may well be worse than the December projection, which called for a decline of 6.4 percent compared to the 2009 fiscal year.
And that could mean even lower state income numbers for the 2011 fiscal year, which she said could require budget cuts greater than $500 million now being considered by the Legislature.
The state's economic situation will be worse, she said, if the Legislature fails to pass some of the measures needed to make certain budget changes in 2011. That includes the bill requiring all new state employees to pay 4 percent of their salary into the state pension fund, in effect replacing state contributions into the fund.