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Missouri state budget

The state of Missouri faced a budget shortfall by 2012 ranging between $600 million and $1 billion, with the state predicting the smaller figure and the Missouri Budget Project the higher estimate.^[1] The state legislature passed a $23 billion budget for FY2012 on May 5, 2011, and it spent approximately the same amount as the FY2011 state budget.^[2] Governor Jay Nixon, on June 10, 2011, made $172 million in budget cuts aimed in order to both balance the state finances and assist the state in recovering from natural disasters.^[3] He signed the budget the day after making the cuts.^[4]

A 2011 analysis of the state’s financial reports over the last five years by the Missouri Watchdog reveled an increase in state spending of 20.4%.^[5]

Missouri has a total state debt of approximately $66,307,890,000, when calculated by adding the total of outstanding official debt, pension and other post-employment benefits (OPEB) liabilities, Unemployment Trust Fund loans, and the budget gap. ^[6]

See also: The Missouri State Budget on State Budget Solutions

[edit] Fiscal Year 2013 State Budget

On April 25, 2012, the Senate passed a $24 billion budget that does not cut services to the blind at the House budget does, and gives state employees earning up to $45,000 annually a raise.^[9] The budget now goes to a conference committee, and the legislature must present it to the governor by May 11, 2012.^[9]

Missouri officials in Dec. 2011 predicted a 3.9 increase in state revenue, giving the state approximately $7.6 billion for FY2013.^[10] The state faces a deficit of $500 million.^[11]State Representative Tony Dugger said that the FY2013 budget discussions would include no plans for proposed tax increases or new taxes.^[12]

Legislative Proposed Budget

The conference committee made up of lawmakers from both chambers agreed on a budget on May 10, 2012,^[13] and sent the budget to the governor for his signature.^[14] It spends $50 million less than the governor's proposed budget.^[13] The budget spends $8 billion of general revenue, the most flexible area of the budget, and funding for public schools remains the same as FY2012.^[14] Highlights of the budget include:^[13]

• A health care program for blind Missourians will receive most of its funding from the state budget;
• Seven universities will split a $3 million boost to higher education funding;
• Missouri's seven veterans homes will be funded primarily through the state's casino entrance fee;
• State workers who earn less than $70,000 annually will receive 2 percent raises in the coming year.

The House Budget Committee added $1 billion to the budget. The House budget plan allots just 75 percent of the additional Medicaid money requested to cover an increased use of some Department of Mental Health services. It also allots 75 percent of the amount needed to offset a decline in the federal matching rate for Missouri's Medicaid services in the departments of social services and health.^[15]

The House approved the 13 appropriations bills that make up the state’s FY2013 operating budget^[16] on March 22, 2012.^[17] The budget included $6 million for a scaled-down version of the health care program, with $4 million of that total coming from legislation that hasn’t passed yet that ends a sales tax exemption for newspapers.^[17] It eliminates a $28 million health care program that serves about 2,800 blind people who do not qualify for Medicaid, and directed that money toward higher education to avoid cuts at the state's universities.^[17]

The Senate Appropriations Committee agreed to keep the House’s proposals for higher education funding, which will keep spending stable relative to this year’s amount. Senators said they were also looking for a way to restore funding to the program for the blind, which the House had cut to fund higher education.^[18]

The Senate also differed with Nixon and the House on an increase in pay for state employees, who have not seen a raise in four years. Nixon recommended all employees get an increase but delayed its effective start until Jan. 1. The House approved a pay raise starting July 1 but would apply it only to those workers making less than $70,000. The Senate approved a plan that would also start on July 1 but only cover workers making less than $45,000.^[18]

Governor's Proposed Budget

Gov. Jay Nixon presented his proposed FY2013 budget on Jan. 17, 2012.

The budget cuts $508 million, and those cuts include:

• $191 million from Medicaid,
• $89 million from higher education, and
• 816 state jobs^[19]

The proposed budget increases funding in some areas, including:

• K-12 school funding by $5 million, but it is still nearly $500 million less than what is called for by the state’s school funding formula, and
• a 2 percent raise for state employees, starting Jan. 1, 2013, at a cost of $23.6 million.^[20]

The plan relies on $52 million in increased revenue from a tax amnesty plan that twice failed to clear the legislature in 2011.^[20] Other sources of new revenue include:

• expanding a state license ban for professionals and businesses that haven’t paid state taxes;
• transfer of money from a fund of the Missouri Health and Educational Facilities Authority; and
• increasing casino fees.

The governor's plan predicts that all together, a total of $100 million in new revenue could be generated.^[21]

The governor proposed finding money to plug a budget shortfall by asking universities to give the state money from their reserve funds. The governor's proposal calls for the University of Missouri to chip in $63 million and four other schools to come up with lesser amounts, for a total of $107 million.^[22] On Jan. 5, 2012, the governor said that plan was now "off the table."^[11] When the House cut a program for the blind to offset cuts to higher education, the governor proposed using $17.75 million in new federal money related to the Medicaid program to supplement blind health care.^[18]

[edit] Fiscal Year 2012 State Budget

• See past state budgets

Missouri faced an estimated $500 million budget deficit for FY2012^[23], equivalent to $83 for each state resident.^[24] Lawmakers passed a $23.2 billion operating budget for FY2012 on May 5, 2011.^[25] Gov. Nixon signed the budget on June 10, 2011, but he first cut $172 million from the budget.^[4] A summary of the budget bills from the Office of Administration can be found here.

When a mortgage foreclosure settlement between banks and states was announced in Feb. 2012, Attorney General Chris Koster said that he plans to put $40 million of Missouri's mortgage foreclosure settlement money -- about 20 percent of the total $196 million that the state will receive -- into the general state fund.^[26] Gov. Jay Nixon then said he planned to use nearly all of the state's $41 million settlement payment to offset some of the budget cuts he made earlier in the fiscal year, although he did not specify which cuts.^[27]

In August, the governor restored $1.2 million of his prior cuts to programs for elderly and children. He did so because of a 9.13 percent rise in state individual income tax collections in the prior 12 months, taking that as a sign that revenue growth is likely to continue through FY2012. The state's budget director said that it on target to meet its budget growth figure, estimated at around two percent, despite a 0.9 percent decline in sale tax revenue.^[28]

[edit] Natural Disaster Costs and the Governor's Authority

Following devastating tornadoes in Joplin, Missouri, the governor withheld $172 million in state funding, including $57 million in general revenue funds, for various programs in order to pay for disaster recovery. Missouri state Auditor Tom Schweich filed a lawsuit against Gov. Nixon on Aug. 26, 2011, alleging the governor violated the state constitution when he withheld the funds, saying that the process was not legal and not transparent. Republicans have commented that, after Nixon withheld the funds in June, the budget was more closely aligned with his original recommendations than it was when the Legislature adjourned.^[29]

On Oct. 31, 2011, a Cole County judge heard arguments on whether the governor cut the state budget regardless of whether revenue is running short. The case is expected to focus on a provision in the Missouri Constitution that reads: "a section of the Missouri Constitution that states: "The governor may control the rate at which any appropriation is expended during the period of the appropriation by allotment or other means, and may reduce the expenditures of the state or any of its agencies below their appropriations whenever the actual revenues are less than the revenue estimates upon which the appropriations were based."^[30]

[edit] Gov. Nixon's Cuts

After the passage of the bill, Gov. Jay Nixon cautioned that he may have to make additional cuts because it spends at least $30 million more than he expects the state to receive in revenues that he may have to make cuts.^[25] Nixon made good on that threat on June 10, 2011, when he announced that he would cut $172 million in order to balance state finances and also help rebuild portions of the state damaged by natural disasters. State Budget Director Linda Luebbering said additional cuts may have to be made down the road depending on the cost of the disaster and future revenue projections.^[31]

His cuts includes:

• $14.9 million from universities^[31]
• $1.9 million from community colleges^[31]
• $13.9 million to Medicaid^[31]
• $8 million for school buses^[4]
• $6 million to the judicial branch^[31]
• $3 million for college scholarships ^[4]
• $2 million to corrections with management encouraged to use comp time and other tools to save money^[31]
• $800,000 million from the Legislature's budget^[31]

The cuts to universities and colleges match those that Nixon first proposed identical cuts in January, when he released his initial budget proposal. Overall, he cut 46 programs.^[31]

[edit] Legislative Budget

The legislature approved a $23.2 billion operating budget for FY2012 on May 5, 2011. The budget includes a $1.1 million increase for the state's oversight of dog-breeding businesses and cuts $1.6 million from state aid to conduct property assessments, which help set a property tax base for local schools. It also eliminates funding for the chef at the governor's mansion.^[25] The budget will phase out the corporate franchise fee, costing the state $24 million in FY2012.^[31] The budget reduces state aid to conduct property assessments by $1.6 million. he budget includes a $1.1 million increase for the state's oversight of dog-breeding businesses, which have been a focal-point of controversy in Missouri.^[32]

Education

Under the legislative version of the budget, K-12 public schools will receive $3 billion in basic aid, the same amount as the current year but $180 million less than what the state's school funding formula dictates. The budget provides $107 million for school transportation, which provides funding for busing, $45 million less than what schools were supposed to get this year, but about $10 million more than what they actually got after Nixon's budget cuts.^[32]

For higher education, the governor's budget plan would have reduced core budgets of colleges and universities by 7 percent, but the legislative budget includes a roughly 5.5 percent cut. For the second year, the primary college scholarship program will rely on the transfer of $30 million from the Missouri Higher Education Loan Authority, which services college loans.^[32][25]

Initial House and Senate Proposals

The Senate approved its state budget proposal, which totals $23.2 billion, on April 20, 2011.^[33] It keeps basic school aid the same as last year’s budget^[33] and would restore part of the cuts that had been proposed for school busing aid and for public colleges and universities.^[34]

The House approved its $23.2 billion version of the state budget.^[35] The plan approved by the House is $700 million less than what the state planned to spend in FY2011 and $142 million more Gov. Nixon's proposed FY2012 budget.^[36] The House budget provided $200,000 for the Film Commission, which was cut in the governor's version of the budget, added $200,000 more for Parents as Teachers and spends $2 million for a program at Missouri State University that aims to bring more pharmacists to the area. The budget plan would allot about $3 billion in basic aid for public schools in the upcoming academic year, the same amount they received this year. ^[37]

[edit] Negotiations

Presumptive House Speaker Steven Tilley said Republicans would not support tax increases, meaning that the General Assembly will likely have to make $500 million in cuts to the budget.^[24] Just under one third -- about $7.5 billion -- of the FY2011 budget comes from "general revenue," or places where legislators are free to cut.^[24] Most of the general revenue budget goes toward health care or education.^[24]

In his State of the State address on Jan. 19, 2011, the governor said that he would reduce total state spending and while keeping K-12 school funding the same, he planned to reduce aid to colleges and cut around 860 state employee positions.^[38] In addition, the governor said he would either cap or eliminate the state's tax credit programs for businesses.^[38]

Net general revenue collections in March for the fiscal year-to-date, starting July 1, totaled $4.98 billion, up 6.5 percent from $4.69 billion in the same period last year, according to numbers from the Missouri Office of Administration.^[5] The state could miss out on as much as $190 million in revenue over FY2011 due to federal tax changes and because the state's tax laws are linked, or "coupled," to federal tax rules for business purchases.^[39]

[edit] Governor's Proposed Budget

Gov. Nixon proposed a $23.1 billion operating budget on Jan. 19, 2011. The governor's spending proposal breaks down as follows:^[40]

[edit] Budget transparency

• See sample transparency legislation at the Sunshine Standard

Missouri Accountability Portal is the name of the publicly available website created by the Missouri government. It discloses information about the Missouri government's spending, and includes data on state employee salaries, agency expenditures, and tax credit information. The Missouri Accountability Portal was created at the Executive Order of Governor Matt Blunt in July 2007.

[edit] Government tools

Missouri Accountability Portal provides a database of state financial information, which is searchable by criteria such as expenditures, vendors, contracts, and employee names. The following table is helpful in evaluating the level of transparency provided by Missouri Accountability Portal:

Criteria for evaluating spending databases

State Database	Searchability	Grants	Contracts	Line Item Expenditures	Dept/Agency Budgets	Public Employee Salary
Missouri Accountability Portal	Y	N	Y	Y	Y	Y

See also: Evaluation of Missouri state website

[edit] Fiscal Year 2011 State Budget

Find the state’s FY2011 Comprehensive Annual Financial Report (CAFR) compiled by the state government here.

With an increase in revenues announced in January 2011, Gov. Nixon released $7.5 million in state funding for school districts to use for transportation beginning this month.^[41] The funds came from $70 million in transportation funds he withheld from districts last year to help balance the budget.^[41]

In Dec. 2010, the National Conference of State Legislatures said that the state faced a midyear shortfall of $300 million, which represents 3.8% of the FY2011 state budget.^[42]

A special House budget committee reviewed state budgets looking for ways to cut costs before lawmakers return for their annual session starting in January 2011 in anticipation of a budget hole of several hundred million dollars.^[43]

The federal stimulus bill will provide the state with $292 million for Medicaid and $189.7 million for education, which is expected to save 3,000 jobs across the state.^[44]

Gov. Jay Nixon proposed a nearly $23.9 billion operating budget in January, 2010, but tax revenues continued to decline following the governor's proposal. The House of Representatives and Senate negotiated a $23 billion state budget for Fiscal Year 2011.^[45] State officials said, however, that they are uncertain about when — or if — Missouri will receive an extension of federal stimulus money, and also concerned about declining revenues. Given those factors, Nixon said that an additional $500 million needed to be trimmed from his budget plan.^[45] The budget crafted by legislators does not appear to meet the cuts called for to balance the FY 2011 budget.^[45] In terms of revenue sources, the budget assumes that education will reap $3 from increased lottery game sales for every $1 of advertising spent by the state. Budget negotiators agreed to boost advertising for the Missouri Lottery by $8 million — a more than sixfold increase, although it decreased the tourism's budget by 40%.^[45] In the budget approved by the legislature on April 29, 201, state funds, mostly derived from taxes, constitute about $7.8 billion —$484.2 million less than the recommendation Nixon, a Democrat, put forward in January.^[46] Lawmakers also held state funding for schools steady at just over $3 billion, a move not in keeping with the state’s formula for K-12 education funding, which calls for a $106 million increase. In his budget, Nixon had proposed an $18 million increase.^[46]

Net general revenue collections declined in Missouri to 9.1 percent to $6.77 billion for fiscal year 2010.^[47] ending June 30th, compared to $7.45 billion in fiscal year 2009, according to figures released Friday.

In October 2010, the state still faced an estimated budget shortfall of $400 to $900 million for fiscal 2012, but revenue collections in Missouri were on the rise. Despite the attention given to budget cuts, analysis shows state government spending has actually continued to increase. However, over the past decade Missouri has seen a $1 billion loss in revenue.^[48]

General revenue collections for the 2011 fiscal year-to-date, starting on July 1st and ending Sept. 30, increased 2.6 percent to $1.75 billion this year compared to $1.71 billion in the same period the year prior, according to a report released October 18, 2010. Revenue for September increased by 9.1 percent to $707.7 million compared to $648.7 million last year.

Corporate income and corporate franchise tax collections increased 15.5 percent to $13.5 million this fiscal year-to-date compared to $113 million last year. Corporate income increased 22.9 percent for the month.^[49]

[edit] Budget Background

Missouri's fiscal year begins July 1 and ends June 30th of the following year. In October state department agencies prepare budget requests and revenue estimates for the upcoming budget year. By the end of December the Governor reviews both the requests and the revenue estimates prior to presenting a budget recommendation to the Legislature. Both the House and the Senate review the bill, hold a series of hearings and make any necessary amendments prior to approving the budget. The Senate usually finishes their work on budget about three weeks before the Legislature adjourns at the end of April. But, all appropriations bills must be passed by the General Assembly one week before the session ends, May 8, 2009. The appropriations are then forwarded to the Governor who has line item veto power and can reduce or eliminate any amount of funding for any item in a bill before signing it into law. ^[50]

[edit] Accounting Principles

Main article: Missouri government accounting principles

Susan Montee was elected Missouri State Auditor in November of 2006. The State Auditor's Office is Missouri's independent watchdog agency, charged with auditing approximately 200 state agencies and boards and commissions; the state court system, including 45 judicial circuits and nearly 400 municipal courts; and the 89 counties in Missouri that do not have a county auditor. The State Auditor may also be called on to audit local units of government by citizen petition. On average, 20 audits of local government entities are performed each year. Missouri's audit reports are published online.^[51]

State Treasurer Clint Zweifel is the State of Missouri's Chief Financial Officer, elected in November of 2008. The State Treasurer's Office manages Missouri's annual state revenues, directs the State's banking services and manages Missouri's $3.1 billion investment portfolio.^[52]

The Missouri Division of Accounting is responsible for operation of the statewide accounting and payroll systems and is the custodian of the official accounting records of the state. The division prepares payments, publishes annual financial reports, administers bond sales for the Board of Fund Commissioners and Board of Public Buildings, and administers the social security coverage for state political subdivisions. Mark A. Kaiser is Director of the Division of Accounting.^[53]

[edit] Stimulus

Missouri has received $4.8 billion in federal funding from the American Recovery and Reinvestment Act of 2009.^[55]

[edit] Public Employees

Main article: Missouri public employee salaries

Main article: Missouri public pensions

The Missouri Accountability Portal provides information about state employees pay. Users can view pay information about the employees of the State of Missouri by their Agency of employment, Position Title or Employee Name. It provides gross pay amounts by the last pay cycle and year to date.

The Better Government Association offers this database of selected public payrolls. The BGA database includes salaries of employees of the State of Missouri along with the states of Illinois and Indiana.

According to 2008 Census data, the state of Missouri and local governments in the state employed a total of 391,994 people.^[56] Of those employees, 295,212 were full-time employees receiving a net pay of $974,910,528 per month and 96,782 were part-time employees paid $80,740,861 per month.^[56] More than 55% of those employees, or 217,798 employees, were in education or higher education.^[56]

[edit] See Also

• Missouri taxpayer-funded lobbying
• Missouri public pensions

[edit] External links

[edit] Additional reading

[edit] References

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