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Sharp cuts in state government may be on horizon with Nixon's new proposals

This article first appeared in the St. Louis Beacon, March 12, 2010 - Missouri Gov. Jay Nixon announced Thursday that he was making another $126 million in budget trims for the current fiscal year, which he says has seen the largest decline in state income in Missouri's history.

The $126 million is on top of more than $700 million in earlier budget cuts.

But his plans for the coming fiscal year, which begins July 1, are even more austere:

  • Eliminating 1,000 state jobs, in addition to 1,800 he had trimmed earlier.
  • Combining the state's two education departments -- which now deal separately with elementary and secondary education, and with higher education -- and merging the state's Water Patrol with the Highway Patrol.
  • Ending the state's practice of having an office of the Family Support Division in each of Missouri's 114 counties, and replacing them with regional offices. Nixon also called for privatizing the collection of child support.
  • Re-examining the state's tax credit system, which now costs the state $585 million. That's an 86 percent growth over the past 10 years, Nixon said.
  • Changing the state's pension and health care for state employees.
  • Eliminating state scholarships for private universities and colleges in the state.
  • Combining the various sections of the Department of Natural Resources so that all permits are issued by "a one-stop shop."
  • Selling some state buildings and 2,000 state-owned cars.
  • Eliminating three state holidays, including Truman's birthday, which Nixon says will save the state $1.2 million apiece in lost time and wages.

"We're talking about real savings in tough times,'' the governor said in an address delivered in Springfield, Mo. "As one fiscally conservative Democrat to another, Harry, I hope you understand."
Some cuts can be done outright by Nixon's administration, while others would require approval of the state Legislature.

A Nixon spokesman said the governor doesn't need legislative approval to sell state cars and some state property, consolidate labs and conduct most of the layoffs. He also can unilaterally end the traditional state workers holiday on the Friday after Thanksgiving because that break is done by executive order.

The rest of his proposed cuts, including the department mergers and eliminating the other two holidays will require legislative approval, the spokesman said.

Nixon said the dramatic actions were necessary to bridge a $500 million shortfall in next year's budget, compared to what his administration had submitted as a proposed budget to the state Legislature several months ago.

Nixon said the cuts and consolidations were the only way the state could balance its budget without raising taxes.

The governor had hinted about layoffs and department mergers last weekend when he was in Hannibal for his party's Democrat Days. So had state Senate President Pro Tem Charlie Shields, R-St. Joseph, a couple weeks ago.

State Commissioner of Higher Education Robert B. Stein issued a statement of support for Nixon's plan to merge that department with the state Department of Elementary and Secondary Education.

"Unprecedented problems call for creative, innovative solutions," Stein said. "Centralization of administrative functions --- such as equipment, vehicles and data gathering -- could certainly result in savings. We will use our expertise to bring value to the discussion and explore all options for making the delivery of education to Missouri citizens more efficient."

Chris Nicastro, commissioner of elementary and secondary education, said in a statement that she looks forward to further discussion of Nixon's proposal.

"A good working relationship already exists between the two agencies and their governing boards – the Coordinating Board for Higher Education and the State Board of Education," she said. "For several years, our two agencies have been involved in planning and joint projects related to academic standards, sharing of data, dual credit and other issues – all as a part of the effort to better align Missouri’s education policies across the board – preschool to graduate school (P-20). 

"Our overarching mission and purpose is to create and maintain a high-quality public education system that serves the citizens of Missouri – at every age level."  

Various other groups also have been weighing in. Late Wednesday, for example, the Communication Workers of America -- whose Missouri State Workers Union represents some state workers -- issued a statement saying it suspected that Nixon would announce more layoffs, and asked why state workers and low-income people "appear to be bearing the brunt of the cuts."

Nixon said today that the additional 1,000 layoffs "will be a difficult process, and we'll be there every step of the way to help provide training and support as these folks transition to new careers."

Nixon's call for curbing state tax credits is in line with one of the union's suggestions. His proposal also could be welcome news to some state legislators, generally Republicans, who have been taking aim at the various state tax-credit programs for years.

Nixon said today that he agreed. "The state is overpaying, and tax credits are underperforming. That must change.

"We need to use tax credits strategically and make sure they are moving our economy forward. That means putting caps on some tax credits, and giving the Department of Economic Development more discretion over which projects we will be investing in."

Nixon's plan could put him at odds with St. Louis, where Mayor Francis Slay and others are strong supporters of the state's historic tax-credit program, which numerous developers have used to rehabilitate older buildings.

Nixon did pledge that one tax-credit program is off-limits. "We will NOT touch the circuit-breaker tax credits that help seniors and disabled folks stay in their homes," he said. "They'll still be protected, as they should be."

Nixon also called for the Legislature to reduce the state's subsidies for biofuels. "We will continue to fund biodiesel for the rest of this year, but the current subsidy levels are not sustainable," he said. "I will work with the Legislature to develop a plan for this industry that fits with our energy goals and stays within our means."

Nixon's announcement coincided with the release of the latest state budget figures.

For the current fiscal year, said the state Office of Administration, "the revised estimate is that net general revenue collections will decline to $6.73 billion, a $700 million decrease from Fiscal Year 2009 collections. This will make the Fiscal Year 2010 decline the largest in history."

Jo Mannies is a freelance journalist and former political reporter at St. Louis Public Radio.