Nixon Plans New Spending for Next Budget Year

2 years 8 months 4 days ago January 21, 2014 Jan 21, 2014 Tuesday, January 21 2014 Tuesday, January 21, 2014 8:20:00 PM CST in News
By: Nick Thompson, KOMU 8 Reporter

JEFFERSON CITY - Gov. Jay Nixon's budget director outlined hundreds of millions of dollars worth of funding increases for state programs for the 2015 budget year before the governor delivered his State of the State address Tuesday.

State Budget Director Linda Luebbering said the governor would like to make some new investments because tax revenues are up, consumer confidence has increased and Missouri employers are creating jobs again.

KOMU 8 News has broken down some of the governor's major proposals below. The 2015 budget year begins on July 1, 2014.

THE MONEY COMING IN

General Revenue funds make about roughly a third of the state budget and those funds come from sales and income tax collections. The rest of the money comes from the fuel tax, matching funds from the federal government and other sources.

General revenue funds pay for schools, public safety, mental health and many other services.

The governor's budget assumes tax receipts will grow by 5.2 percent, meaning the state would have about $430 million more worth of general revenue funds to work with under the governor's proposal than it will have in the current budget year.

Before drafting a budget, lawmakers and the governor work on a consensus revenue estimate, except there does not appear to be consensus this year.

Caleb Rowden, R-Columbia, told KOMU 8 News before the speech Republicans want to assume a more conservative 4.2 percent growth figure for tax collections. Rowden said Nixon's growth estimate is off by about $140 million.

EDUCATION

State lawmakers created the current K-12 school funding formula and put it in place before the 2006-2007 school year. Since it was created, no final state budget has funded K-12 education at the level required by the formula.

In the current budget year, Nixon and lawmakers signed off on a budget that funded schools at a level $600 million below what the formula called for.

Nixon asked lawmakers Tuesday night to approve a $278 million increase in K-12 funding. Nixon has said recently he would like to fully fund the formula before he leaves office. If lawmakers approve a figure close to what the governor has called for by the end of the budget process, Nixon could be halfway to his goal.

Overall, the governor wants to increase spending for education at all levels from Pre-Kindergarten through college by $493 million.

Under the governor's proposal, the University of Missouri system would receive a nearly $441 million appropriation in the 2015 budget year, a roughly 10.5 percent increase over the $395 million budgeted this year.

RE-BUILDING FULTON STATE HOSPITAL

Fulton State Hospital is the oldest mental health facility of its kind west of the Mississippi River, and lawmakers have been looking for a new source of funding for years to re-build the facility. To do it, hospital officials have said lawmakers need to find about $215 million somewhere.

The hospital is Callway County's largest employer and more than 1,000 mid-Missourians work at the facility, but it has been called one of the most dangerous places to work in the state.

Nixon is proposing that the state set aside $28 million in next year's budget to pay off bonds that will be used to build a new hospital.

The new bonds would be appropriation bonds, meaning they would be paid off with general revenue dollars. Because the bonds are appropriation bonds, Luebbering said the proposal would not need to get voter approval like most bond issues.

Lawmakers would have to agree to the bond proposal in the current legislative session and would have to agree in the future to continue appropriating money to pay off the debt.

EXPANDING MEDICAID

Nixon has again called for expanding Medicaid to cover all adults with incomes up to 138 percent of the federal poverty level, or about $30,000 a year. The expansion is part of the President's health law, but Missouri is one of dozens of states around the country deciding whether to expand its Medicaid rolls.

The federal government would pay for the full cost of the expansion in the 2015 and 2016 budget year, before the state government would be expected to kick in some of the cost.

With the expansion, Missouri would receive about $1.7 billion in federal funds next year.

Luebbering said Missouri would start saving anywhere from $77 million to $143 million annually because the federal government would help cover the cost of covering some disabled Missourians who currently receive full coverage from the state.

If Missouri decides to expand Medicaid this year, Luebbering estimates Missouri would be required to cover more than $160 million of the program's cost by the 2022 budget year.

Many Republican lawmakers opposed Medicaid expansion in last year's legislative sesison because they said it would increase the program's burden on the state budget. Some also said the state should not enroll more people into a broken government program.

Rep. Jay Barnes, R-Jefferson City, has championed "Medicaid transformation" in the past and will work on the proposal again this year. The transformation would expand eligibility but would also trim eligibility for some and put in new measures to reduce costs, fraud and waste.

Nixon's budget accounted for a "reform savings" if the legislature decides to expand eligibility under a proposal like the one Barnes is pushing.

Luebbering estimates the state could save up to $20 million in the 2015 budget year with the reform savings.

 

 

 

 

 

 

 

 

 

 

 

 

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