Legislature passes budget early, but Nixon and allies not thrilled with result
This article first appeared in the St. Louis Beacon, April 29, 2010 - Before leaving the Capitol for the weekend, the Republican-led Missouri Legislature approved a new state budget for the fiscal year that begins July 1 and did so a week before the constitutional deadline.
Republican leaders can't recall when the Legislature last acted on a budget so early. But Gov. Jay Nixon and the Democratic minority in the legislature aren't as happy with the $23.3 billion result because the budget doesn't reflect the governor's aim to restrict the state's 59 tax credit programs that are costing the state close to $600 million a year.
The budget did, however, take into account the $500 million in additional cuts that Nixon's budget staff had said was needed, compared to earlier projections that predicted rosier state revenue numbers.
Senate Appropriations chairman Sen. Rob Mayer, R-Dexter, handled the budget bills in his chamber. “This is one of the toughest budget years in our state’s history,” said Mayer in a statement. “Missouri’s constitution requires us to not spend more than we take in. With an eye on our state’s future, we made some difficult decisions to live within our means without raising taxes.”
“We fulfilled our responsibility to the people of Missouri to make the difficult decisions needed to continue down a fiscally conservative path,” said House Budget Committee chairman Allen Icet, R-Wildwood. “I am pleased to report that we have passed a balanced budget, on time and without raising taxes.”
State Income Sharply Down Since 2009
The key numbers are contained in the budget's general-revenue portion, which really is the only part over which the Legislature and Nixon have any control and covers most state-government operations. (The rest of the budget reflects, among other things, pass-through spending from programs covered with federal allocations.)
The general-revenue figures also illustrate the state's financial problems.
According to aides with state Senate President Pro Tem Charlie Shields, R-St. Joseph, the final budget approved today calls for $6.85 billion in general-revenue spending for the fiscal year (2011) that begins July 1.
The general-revenue allocation for the current fiscal year (2010) approved by the Legislature was $7.8 billion. But because of income shortfalls, Nixon trimmed that number -- via line-item cuts and withholdings -- by just under $1 billion.
During the 2009 fiscal year, the general-revenue amount allocated and spent was $7.4 billion.
To illustrate the gravity of the state's budget situation, consider this: If state income growth had continued as originally projected, a Shields spokeswoman said, this current fiscal year would have seen general-revenue income about $8 billion, and the 2011 general-revenue figure would have been $8.8 billion.
Shields said in an interview this afternoon that credit for the swift budget action should go to the House-Senate conference committee members, who took only a few days to hash out their differences. A key reason: The dim budget numbers offered little room for maneuvering.
With the work on the 2011 budget now complete, Shields said the Legislature may spend part of this session's final two weeks focusing on the tax-credit issue. But while the Senate is amenable to some changes, the House appears less interested, he added.
The upshot: Shields said it's a real possibility that no changes will be made in the state's tax-credit programs this session.
Nixon, Democrats show some disappointment
Nixon's statement, issued today, focused on the positive: "Over the past four months, my administration has worked with the General Assembly in a bipartisan manner to develop a budget that controls spending, while investing in critical priorities, like education, health care and public safety."
But while the budget was passed, a number of Nixon's initiatives are still pending. "The opportunities for cost-savings truly depend on the passage of numerous additional bills that will right-size, restructure and refocus state government," he said. "It is vital that the legislature send those measures to my desk. Over the next two weeks, my administration will continue to work with the General Assembly in a bipartisan fashion to pass these important reforms. That’s the optimal way to make sure the people of Missouri have a government that protects our vital priorities and a government we can afford."
"Over the coming weeks, I look forward to going through this budget line by line to ensure that Missourians’ tax dollars are spent in the most efficient and effective manner possible," Nixon added, implying that a number of line-item cuts are likely to be made.
But state House Minority Leader Paul LeVota wasn't as charitable:
“The continuing budget crisis is a manmade disaster created by the General Assembly," he said, taking aim at Nixon's favorite tax-credit targets. “Years of generous tax breaks for the well-connected have eroded Missouri’s tax base to the point where it can no longer pay the bills for basic state services. Republican leaders in the General Assembly chose to ignore this reality, and the people of Missouri will suffer for it.”
House Democrats also noted, "While the budget freezes basic state funding for local public school districts, it imposes a 50 percent cut in the state reimbursement to districts for student transportation costs and eliminates or reduces funding for other education costs beyond basic state aid."
“This budget is out of balance financially, it is out of balance in terms of priorities and it is out of balance morally,” said House Minority Whip Jeff Roorda, D-Barnhart.