Missouri Catholic Conference

The Federal Deficit and Consequences for Our Future

Aug 272012

Looming over many of the public policy questions facing our country at this time, be it defense and military spending, Social Security or Medicare, is the growing federal deficit. Earlier this year, the nonpartisan Congressional Budget Office (CBO) issued a report — The 2012 Long-Term Budget Outlook — that offers a fairly sober assessment of the current challenge. The report opens by stating: “In the past few years, the federal government has been recording the largest budget deficits since 1945, both in dollar terms and as a share of the economy.”

According to the CBO, the rising deficit is caused by a number of factors, including the aging of the baby boomer generation, turmoil in the financial sector, declining tax revenue, and an increase in government spending.

The CBO lists several negative consequences to the rising of debt:

greater debt would result in higher interest payments on that debt, which would eventually require higher taxes, a reduction in government benefits and services, or some combination of the two;
rising debt would increasingly restrict policymakers’ ability to use tax and spending policies to respond to unexpected challenges, such as economic downturns or financial crises;
growing debt also would increase the probability of a sudden financial crisis, during which investors would lose confidence in the government’s ability to manage its budget and the government would thereby lose its ability to borrow at affordable rates.

One take away: Democrats and Republicans will need to put aside their partisan differences to address this issue in a responsible manner.

August 27, 2012 Posted by mocatholic at 1:35 pm News Tagged with: budget, Federal Deficit No Responses »

Missouri Senate Committee Approves Budget Plan

Apr 132012

This week the Senate Appropriations Committee endorsed a state budget plan of roughly $24 billion dollars. The plan, which is about $86 million less than the House version, now goes to the full Senate for more debate.

In the end, the committee kept funding for colleges flat while slightly boosting basic state aid for public school districts. The trade-off saw cuts to social services, including less money to state grants to preschools and less money to help low-income working parents with child care costs.

One controversial item in the budget was a health program to the blind. The House made a substantial cut in the program, while the Senate restored some of the money, but required participants to start paying deductibles and premiums.

After the Senate completes its work, the budget will go to a House-Senate Conference committee to resolve differences. Lawmakers must complete their work on next year’s budget by May 11th and submit it to the governor.

April 13, 2012 Posted by mocatholic at 11:16 am Education, Missouri General Assembly, News, Taxation and Revenue Tagged with: budget No Responses »

Budget Director Filling Holes in State Budget

Feb 242012

Missouri faces an estimated $460 million hole in its 2013 budget. This week State Budge Director Linda Luebbering presented the House Budget Committee with the Nixon Administration’s ideas on how to fill the budget gaps.

On the good side, Luebbering noted that the hole had been $500 million, but that a recent mortgage settlement by the Attorney General knocked the amount down $40 million.

The biggest adjustment to balancing the budget would be found in Medicaid. Because of changes in the federal match requirement for states, Luebbering told the committee that $191.7 million would be reduced from what budget planners expected Medicaid to cost Missouri in the next fiscal year. Another $75 million of the hole could be filled with measures now pending before the General Assembly, including a tax amnesty bill which could generate almost $52 million.

Luebbering told the committee that about $80 million could be saved by restructuring state debt, administrative savings, and reductions to public health agencies and bio-diesel subsidy payments.

Luebbering informed the committee of some positive signs in the economy including a lower unemployment rate and a slight growth of 1.3 percent in revenue collections at the end of January.

February 24, 2012 Posted by mocatholic at 10:33 am Missouri General Assembly, News Tagged with: budget No Responses »

Gov. Nixon Proposes Budget Cuts for Medicaid, Colleges in State of State Address

Jan 202012

Gov. Nixon delivers the State of State address on Tuesday, Jan. 17, 2012. Photo courtesy of the Office of the Governor.

On Tuesday night, Gov. Nixon delivered his state of the state address before a packed House chamber of state senators and representatives. The governor called for more than $500 million in state budget cuts. Under the governor’s proposed 2013 budget, some 816 government jobs would be eliminated. Funding for public universities would be cut by 12.5 percent, while Medicaid, the health insurance program for the poor, would see a cut of $191.7 million.

The proposed Medicaid savings would come from requiring more use of generic drugs and maximizing federal matching funds for nursing home care. The proposed Medicaid cuts do not reduce eligibility for services. The Missouri Catholic Conference (MCC) in recent years has sought to protect funding for Medicaid as many of the working poor find themselves employed by businesses that do not offer health insurance benefits.

The proposed job cuts bring to 4,181 the state jobs Gov. Nixon has ended during his term. The downsizing of state government has been driven by a deep recession that has reduced tax collections, making less state revenue available for state services.

For the last several years, emergency federal stimulus money that allowed officials to plug holes in the state budget gave state government some cushion from the effects of the recession. That federal money is no longer available, however, so all states, including Missouri, are having to either raise more revenue or cut funding for programs.

The governor’s proposal is for the state budget year that begins July 1, 2012. His budget recommendations will now be considered by the general assembly, which has until early May to submit a budget to the governor for his approval. Click here for a St. Louis Post-Dispatch article on the proposed budget cuts.

January 20, 2012 Posted by mocatholic at 2:54 pm Missouri General Assembly, News, Taxation and Revenue Tagged with: budget, budget cuts, colleges, Gov. Nixon, medicaid No Responses »

Budget expected to be focus of 2012 session

Jan 062012

Capitol observers anticipate a slow session with most of the focus on approving the 2013 state budget. But the pundits could be wrong, and most legislative sessions offer a few surprises. The Missouri Catholic Conference has a few priorities it would like lawmakers to consider even though it is an election year. To review the MCC priorities, click here.

Legislative leaders have their own ideas of what ought to be covered; click here to watch the opening address by the Speaker of the Missouri House Steve Tilley (R-Perryville) or click here to listen to the opening address by Senate President pro-tem Robert Mayer (R-Dexter).

State Budget – Will the Poor Be the First Victims?

For several years, lawmakers have been able to tout tax cuts while avoiding truly drastic budget cuts because the state has received emergency federal stimulus funds. But now those funds are no longer available and the Missouri state budget faces a $500 million budget hole.

Where will the budget cuts be made? Count on the education lobby groups to vigorously oppose cuts to K-12 public schools. Senate Budget Chair Kurt Schaefer (R-Columbia) will certainly do what he can to protect funding for the University of Missouri and other higher education institutions.

That leaves programs that assist Missouri’s most vulnerable – Medicaid health care for the poor, in-home care services for the indigent elderly, sheltered workshops for the disabled, maternity homes and pregnancy resource centers that offer women alternatives to abortion. Who will defend funding for these programs?

The Missouri Catholic Conference (MCC) recognizes the moral obligation to practice good stewardship in the use of tax dollars. At the same time, the MCC opposes putting the poor first on the budget chopping block simply because they lack the political clout to protect their fate.

As an MCC Citizens’ Network member, we invite you to add your voice to those who urge lawmakers to protect funding for vital state services that assist Missouri’s most vulnerable citizens. Stayed tuned for more on this in the coming weeks.

Ways to Raise Revenue

There are ways to raise revenue that are attractive even to those who generally oppose tax increases. Missouri, for example, has the lowest tobacco tax in the nation. At 17 cents a cigarette pack, Missouri’s tax is lower than even big tobacco producing states such as Kentucky and North and South Carolina. Another possible way to raise revenue would be to end the favoritism granted to out-of-state merchants such as Amazon that don’t collect sales tax like in-state merchants do.

Both ideas may be discussed this session, but it may take an initiative petition that brings the issue directly to voters before action is taken to raise revenue for essential state services.