Governor Nixon Holds Back $1 Billion in the State Budget

Governor Jay Nixon announced this week that he was vetoing or freezing more than $1 billion in state funding, with sizeable cuts in funding to public education. Governor Nixon said the cuts were necessary for the 2015 fiscal year that begins July 1 because the legislature passed a budget that was “dangerously out of balance.” The cuts include nearly $276 million in line-item vetoes and $846 million in temporary withholds that could be released at a later date.

Nixon blamed the cuts on several factors including a final-day “spending spree” by the legislature in which 10 tax cuts were passed and the failure of the legislature to pass Medicaid expansion, which the governor’s budget office believes could have saved on state spending by taking advantage of an increased federal match in the program. Slower-than-expected growth in state revenues also compounded the situation.

“It is one of the most basic principles of responsible fiscal management: you can’t spend more than you take in,” Nixon said.

The cuts include $100 million for K-12 funding formula, $12 million for the needs-based college scholarship, Access Missouri, $15 million from K-12 transportation, and $43 million for Higher Education.  The governor will also eliminate 260 state jobs and close 19 regional state offices for various state agencies.  Funding was also withheld for restored general dental coverage, occupational, speech, and physical therapy benefits for Medicaid recipients that the legislature had eliminated a decade ago. There were also cuts to the alternatives to abortion program-see next article. A complete listing of budget cuts can be found here.

The Governor did announce that the withholds could be released at a later date if the general assembly doesn’t override his vetoes of the tax cuts bills when they return in September for the annual Veto Session.  A two-thirds vote by lawmakers in each chamber is needed to override the governor’s veto.

 

Posted: June 27, 2014

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