This article first appeared in the St. Louis Beacon, Aug. 19, 2011 - When a Missouri governor withholds money from the state budget, can he spend it on something else?
That, in essence, is the question as state Auditor Tom Schweich and Gov. Jay Nixon tangle over the governor's June decision to withhold $170 million from allocated budget appropriations to help cover the state's costs for the Joplin recovery effort following the May 22 tornado that killed at least 160 people.
Missouri governors have engaged in the practice of "withholding'' budgeted money for decades. "Withholdings'' technically aren't budget cuts, because they can be restored later during the fiscal year, if state revenue levels indicate that enough money is available.
Withholdings have been a common practice, as Missouri governors seek to comply with the constitution's mandate that the state end its fiscal year with a balanced budget. Governors also have seen withholdings as less onerous than having to make huge cuts during the final months of a fiscal year, because of unexpected financial downturns.
Schweich, a Republican who took office in January, is questioning the practice -- particularly since Nixon is planning to use the withheld money for something else, in this case the costly disaster relief for Joplin.
As a rule, previous governors generally have not re-allocated withheld money.
Schweich alleged in a letter sent to the governor on Friday that Nixon, a Democrat, is violating the state constitution and exceeding his authority. Nixon's staff says that's not the case.
Schweich noted that the money had been "appropriated by the Missouri Legislature for programs such as community colleges, children's services, courts and judges, the University of Missouri, senior health programs and others."
"The state auditor has determined that, when the governor decided to withhold funds from these programs, there was no basis in the Missouri Constitution, law or accounting for doing so."
"The stated basis for the governor's withholding from these programs is that funds need to be available for relief efforts in Joplin and other areas of Missouri struck by natural disasters over the last few months," Schweich wrote. "We do not question the need for state assistance in affected areas; it is critical. However, the approach chosen by the governor is problematic.
"Our analysis is as follows: under the Missouri Constitution, the governor may withhold funds appropriated by the legislature if there is an actual shortfall in state revenues below the amount on which appropriations were based," the auditor continued.
"The governor's budget director was unable to provide the auditors with accounting data of any kind to support the more than $170 million in withholdings; they produced no projections, spreadsheets, studies or analyses to justify the withholds. In fact, the governor made his decision to withhold more than $170 million from the fiscal year 2012 budget before the fiscal year even began..."
Schweich contended that Nixon should "work with the legislature'' and come up with other ways to find the $170 million. "These options include, but are not limited to, utilizing the $159 million revenue surplus from fiscal year 2011; working through the supplemental budget process; borrowing from the Missouri Rainy Day Fund; or financing these disaster recoveries in future budget cycles."
"In sum, we believe the governor has exceeded his authority in making these withholds," the auditor concluded. "The governor is effectively using the tragedies in Joplin and other parts of the state to circumvent the legislature so that he may pick and choose which programs to support. This is a disservice to the people of Joplin and the people of Missouri as a whole and renders the members of the Missouri Legislature, the representatives of the people, irrelevant...."
Nixon's staff replied that he is following the traditional practices of his predecessors. "...Gov. Nixon has made the tough decisions necessary to balance the state's budget and maintain Missouri's AAA credit rating. The governor has the constitutional responsibility and authority to cut spending to balance the budget, a power used by Governors over the years and consistently upheld by the courts. The auditor's letter is wrong."
"Gov. Nixon will continue to ensure that Missouri will meet its obligations to help communities recover and rebuild in the wake of the many natural disasters this year, including the devastating tornado that hit Joplin," his staff added. "The governor will continue to fulfill his responsibility to balance the state budget, fund necessary services and help our communities recover from these disasters."
