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Issue: 1244 Date: 6/26/2014
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Nixon Cuts More Than $1 Billion From FY2015 State Budget

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Mo. Gov. Jay Nixon briefing reporters on cuts to FY2015 state budget.
        Missouri Gov. Jay Nixon has announced $1.1 billion in cuts from the Fiscal Year 2015 state budget that goes into effect July 1.

        Those cuts include nearly $276 million in line-item vetoes and $846 million in temporary withholds, which could be released by the governor at a later date.

        Two hundred sixty jobs would be eliminated. Nineteen regional state offices would be closed, including seven from the Department of Revenue, six from the Department of Natural Resources and six from the Department of Mental Health. The cuts would also cancel a memorandum of understanding for the state to buy the soon-to-be-vacant St. Mary's Hospital in Jefferson City, which was slated to become new state office space and possibly MoDOT's new headquarters.

        "We don't have the money (for that)," Nixon told reporters.

        Nixon, a Democrat, blamed today's cuts primarily on:

        The final-day "spending spree" by the Republican-led General Assembly on several tax incentives and exemptions, which the Nixon administration says would have reduced state revenue "by up to $425 million annually and local revenue by up to $351 million annually."

        The reliance by lawmakers on tobacco settlement payments that "will not be available" and on a tax amnesty bill that did not pass this year.

        Economic uncertainty that's "further exacerbated" by the legislature's refusal to expand Medicaid. Funding added by lawmakers for new government buildings and programs.

        "While eroding our tax base with new loopholes for special interests, the legislature simultaneously littered the budget with earmarks and new government programs, demonstrating misplaced priorities and a stunning lack of fiscal restraint," Nixon said. "It's one of the most basic principles of responsible fiscal management: you can't spend more than you take in. Deficit spending might be the norm out in Washington, D.C., but it is not how we operate here in Missouri."

        The cuts also cuts include withholding $100 million from the K-12 funding formula and $43 million from Higher Education. Nixon told reporters that those cuts could be reversed if lawmakers don't override his tax-break vetoes from earlier this month.

        "I put those in the restriction category," Nixon said. "What do they say, 'last cut, first back' you know. Assuming the vetoes are sustained, I would hope that we'd be in a revenue posture to be able to meet those obligations."

        Missouri lawmakers are scheduled return to Jefferson City on Sept. 10 for their annual veto session.

        Response to Nixon's budget cuts

        The Missouri Republican Party quickly took issue with Nixon's actions. Matt Wills, the party's executive director, was particularly critical of the education cuts.

        "Jay Nixon once again showed his true colors when it comes to education in the state of Missouri," said Wills. "Republicans in the Missouri Legislature took action this year, increasing funding for education by over $100 million and finally offering a fix to the school transfer problem. By vowing to withhold budget increases to K-12 and higher education, Nixon proved again that he does not care about education more than himself."

        The Missouri Chamber of Commerce and Industry also criticized the impact of the governor's cuts on education. "The governor is putting politics ahead of policy, once again, and it is getting old," said Missouri Chamber President and CEO Dan Mehan. "It's petty and only hurts the students he claims he is trying to protect."

        House Speaker Tim Jones, R-Eureka, has also weighed in with the following statement:

        "The governor is back to his same tricks, once again, as he engages in his annual political game of holding our system of public education hostage. This is a governor who tells the public he wants to invest in our young people, but then is all too willing to make school funding his first target and show that public education is his lowest priority when he does not get his way. In this case he is withholding public education funding as leverage to stifle the legislature's efforts to create jobs, reduce taxes and rein in his administration's constant attempts to over-tax Missourians and Missouri businesses. The people of this state should not stand for a governor who provides no leadership on issues that would grow our economy while also serving as a roadblock to our efforts to increase funding to education."

        A statement released by House Budget Chairman Rick Stream, R-Kirkwood, was even harsher, beginning with the statement that "Gov. Nixon has turned his budget wrath on the children and disabled of Missouri."

        "We worked very hard to pass the largest education budget and largest increase to education in the history of the state while still cutting hundreds of millions of dollars in wasted spending elsewhere from the governor's budget," Stream said. "I am saddened that once again our children's education is being used as a political pawn."

        However, not all the reaction to Nixon's cuts was negative. The Coalition for Missouri's Future issued a statement acknowledging their disappointment over the impact of the cuts on education. But, it added, "the governor's prudent action today is, unfortunately, necessary given the General Assembly's irresponsible actions. Despite clear signs of significant revenue shortfalls and declining revenue in future years, the legislature sent to the governor an unbalanced FY2015 budget and passed a slew of special interest tax breaks on the last day of session that, combined, will compromise not only the FY 2015 budget, but state budgets for years to come."


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