Parson calls for tax cuts, raises for Missouri state employees and $400M for broadband expansion
Updated at 7:30 p.m. Jan. 19
With state coffers full of federal pandemic relief funds, Gov. Mike Parson is pledging more than $2.1 billion in spending in areas ranging from infrastructure to higher education.
“The bottom line is, Missouri’s economy is strong,” Parson told lawmakers, his Cabinet and statewide elected officials Wednesday during his State of the State address. “With a historic budget surplus and federal dollars coming to our state, we want to build on our past momentum to capture even greater opportunities for the future of Missourians.”
In addition to the federal spending, which includes $400 million in broadband and $100 million in funding for roads and bridges, Parson wants to cut the state’s income tax rate from 5.4% to 5.3%. The governor is also proposing setting aside 2.5% of last year’s general revenue in a rainy day fund. That would total $281 million next budget year. That’s also the rationale behind adding a one-time $500 million payment to the state employee pension fund.
“In this budget there is a lot of one-time funding for one-time projects,” said Dan Haug, the governor’s budget director. “We did not want to spend a bunch of one-time money on ongoing programs and cause a cliff in the future.”
Another major part of Parson’s $46 billion budget proposal would be to increase teacher pay across the state.
“Missouri is currently ranked 50th in the United States for starting teacher pay, and half of our new teachers leave the profession by their fifth year,” Parson said. “This is unacceptable, and we must do better.”
Parson’s proposal includes increasing the base salary for new teachers to $38,000 a year. Parson calls that a first step toward addressing the issue.
Parson also advocated for raises for state employees. In December, Parson announced his support of 5.5% cost-of-living adjustments as well as a $15-an-hour minimum base pay standard. He reiterated his support in his speech.
“The success of our state relies heavily on these public servants, and we must ensure we are able to recruit and retain quality team members to serve Missouri, and that is why we are proposing an immediate 5.5% cost-of-living adjustment for all state employees. This is long overdue,” Parson said.
The governor's proposal includes $722 million for child care centers, citing the number of providers that closed or cut back on services during the pandemic, and $955 million in increased funding for nursing homes and providers of care for patients with developmental disabilities and behavioral health needs.
While he did not mention it in his speech, House Minority Leader Crystal Quade, D-Springfield, said also included in Parson’s budget is money to fully fund Missouri’s Medicaid program.
Almost all of Parson’s asks will require the approval of the General Assembly. Though the GOP has large majorities in the state House and Senate, there are vocal anti-spending contingents in both chambers.
In one segment of his speech, Parson spent less than six minutes on Missouri’s response to the COVID-19 pandemic, with little time on the current state of it.
The governor touted Missouri’s “balanced approach” to the pandemic, saying a one-size-fits-all response wouldn’t have worked for the state.
Parson also reiterated his disapproval of mandates, saying he will not change his stance on the matter.
“I firmly believe that the people should have a say through their local elected representatives and not be dictated by needless executive action or any one person,” Parson said.
Parson praised the state’s efforts to distribute vaccines, saying that while there is room to improve the state’s vaccination rate — which, according to the Department of Health, is around 54% for fully vaccinated people — the state has worked “tirelessly” to make vaccines available for those who want them.
In a prerecorded video, state Sen. Lauren Arthur, D-Kansas City, gave the Democratic response, urging lawmakers to find the common ground on issues like “education, health care, public safety and economic growth.”
“Too often, a majority of legislators have embraced ideas that cater to political extremes. That approach has come at the expense of our state and all of us,” she said. “I'd like to invite my colleagues and the governor to join me in passing common sense legislation. That's what a majority of Missourians expect, and it's what our constituents deserve.”
But Arthur promised the Democratic caucus would remain united against legislation that threatened voting rights or education funding.
Quade said there are some proposals in Parson’s budget that Democrats will be fighting for.
“There's significant money for things like child care, mental health funding, substance abuse funding, after-school programming, we're hoping is going to be a part of that discussion,” Quade said. “And those are things that we've been fighting for for a really long time.”
Quade said that for some projects, Democrats will be advocating for more funding than Parson is asking for.
Parson’s proposals will likely receive a favorable response in the Republican-controlled legislature, but it is far from a slam dunk.
Senate Majority Leader Caleb Rowden, R-Columbia, said that Parson gave a good State of the State address, but that the idea of allocating all of the state’s federal COVID relief funds in one year gives him pause.
“It’s a matter of figuring out how you invest it in a way that can have an impact over the long haul. Limited government isn’t no government, it’s investing in the right ways at the right moment,” Rowden said.