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Nixon withholds $51 million - mostly Medicaid money - from state budget

Marshall Griffin|St. Louis Public Radio

Missouri's budget for the current fiscal year is being cut again.

Gov. Jay Nixon announced Wednesday that he's withholding $51 million from the FY2017 budget, which runs through June 30 of next year. The vast bulk of the temporary cut is coming out of Medicaid.

He said, though, that one of the reasons he's withholding $42.8 million from Medicaid programs is positive: cost savings enacted by his administration. "In my time as governor, we've work hard to increase efficiency in managed costs in (the) Medicaid program, and we will continue to do so this year."

Nixon told reporters that while Medicaid and similar costs will continue to grow, they're expected to grow at a slower pace than a year ago at this time.

"Some of the supplemental budget requests are far under what those numbers were last year. (The) most recent numbers we're looking at for potential supplemental (Medicaid budget) is only about $54 million, compared to about $278 million last year," he said. "We are in a process where our management of the Medicaid program is yielding direct benefits. We fully expect (the) supplemental (budget) to be nowhere near (the) necessary level that it was last year."

Nixon said a drop in corporate tax collections made the temporary Medicaid cuts necessary, and he blamed that on loopholes created by the Republican-controlled legislature.

Acting budget director Dan Haug told St. Louis Public Radio's Jo Manniesthat corporate tax collections are down by more than 35 percent in less than two years. He blames the drop on a change in Missouri's tax laws that deal with how multi-state corporations divide profits among the states where they do business.

For years, Nixon and fellow Democrats in the legislature have called on Republican leaders to expand Medicaid, which is a key component of President Obama's Affordable Care Act.  Although the U.S. Supreme Court upheld Obamacare, it struck down language that required all 50 states to expand Medicaid.

As a result, Missouri and several other states have refused to expand, creating a coverage gap in which many low-income residents can't afford to purchase health insurance but still make too much money to qualify for Medicaid.

Bonding authority and school buses

In addition to the Medicaid restriction, Nixon is withholding $8.8 million from the state's bonding authority, which is used to maintain buildings. He downplayed any adverse effect that might have on capital improvement projects.

"Because of our strong fiscal management (and) our spotless AAA credit rating, we're going to save taxpayers $8.8 million while continuing to make these historic investments and have less bonded indebtedness when I graduate as governor than we came in," he said. "When you get the good interest rates, we're not going to have to make (a higher) level of payment."

Nixon also announced that he's releasing nearly $4 million in spending restrictions made earlier this year. They include:

  • $1.875 million for renovations at Missouri State University's Glass Hall, which houses the university's business college
  • $1 million for K-12 transportation
  • $500,000 to replace lost federal funding for the Missouri State Highway Patrol
  • $400,000 to expand an emergency room diversion initiative
  • $181,875 for Missouri S&T's Clay County engineering program

Nixon defends history of 'withholds'

Since July 1, Nixon has withheld a total of $201 million from the current state budget, although he's released various amounts since then, including $8.7 million in late October following the settlement of Missouri's lawsuit against Volkswagen over deceptive emission monitoring.

Nixon even bragged a bit to reporters that he's withheld more than $2.2 billion from the state budget since taking office in 2009, and said it was necessary due to attempts by Republicans to overspend.

"Their job is not to balance the budget; their job is to provide spending authority, which is born out by the fact that they have not balanced budgets," he said. "If I don't show great deference to the overspending legislature's view as to what is the proper way to fiscally manage a state, so be it."

As for whether the incoming governor, Eric Greitens, would have to make any temporary spending cuts, "that's up to him."

Follow Marshall Griffin on Twitter:  @MarshallGReport

Marshal was a political reporter for St. Louis Public Radio until 2018.