On eve of big speech, Greitens swings budget ax | St. Louis Public Radio

On eve of big speech, Greitens swings budget ax

Jan 17, 2017

Updated Jan. 17 with reaction from educators – Tuition at Missouri’s public colleges and universities could go up in the wake of Gov. Eric Greitens’ announcement Monday he’s withholding more than $82 million from Missouri’s current higher education budget.

The spending restrictions, or cuts, include $68 million in core funding from universities and community colleges and more than $14 million from other higher ed programs.

Former Gov. Jay Nixon, a Democrat, had negotiated an agreement with university heads to cap tuition at their current levels, but Greitens’ cuts could jeopardize that agreement.

“Currently, that is one thing that we are still evaluating and still looking at what that could mean for tuition increases,” said Liz Coleman, communications director for the Missouri Department of Higher Education.

John Fougere, a spokesman from the University of Missouri System, released the following statement:

“We are reviewing the withholds/cuts announced by the governor yesterday and having discussions with our leadership about how we will address them over the next few weeks. But there are no specifics yet.”

Greitens, a Reppublican, is delivering his first State of the State Address Tuesday night but won’t outline his proposed budget until next month.

Missouri lawmakers may have to grapple with college tuition rates as well. State Sen. Gary Romine, R-Farmington, chairs the Senate education committee.

“The money will have to come from somewhere, and we’ve got to realize that,” Romine said. “We have caps in place, so that’s going to be frustrating to process, so we’re going to have to come to the table and discuss what avenue we can take to get affordable education continued in the state.”

Romine said, though, he hopes the state doesn’t hike tuition to offset Greitens’ budget cuts.

Original story – On the eve of his first State of the State address as chief executive, Gov. Eric Greitens, a Republican, made substantial budget withholdings  – a move that was not unexpected but still elicited criticism from Democrats.

Greitens announced Monday afternoon that he was restricting, or cutting, $146.4 million from the current fiscal year’s budget. He withheld nearly $68 million from core funding to four-year colleges and universities as well as community colleges. He also cut millions more for individual programs and projects at various colleges.

Greitens' 89 budget restrictions include millions of dollars slated for things like tourism advertising, health-care services, local election authority grants and Amtrak state funding. (Click here to see the entire list.)

"You elected me because I’ll always tell it like it is, and more hard choices lie ahead,” Greitens said in a statement. “But as Missourians, I believe that we must come together, tighten our belts, be smart and wise with our tax dollars, and work our way out of this hole by bringing more jobs with higher pay to the people of Missouri.”

In a video posted on social media, Greitens emphasized that not “a single penny was taken out of K-12 classrooms.” Still, the governor did cut some funding related to K-12 education – most notably $8.6 million in transportation costs.

Greitens’ cuts were hardly a surprise. Soon after he was elected, legislators from both parties warned that either Greitens or  then-Gov. Jay Nixon would have to make major cuts to keep the 2017 budget balanced. Nixon ended up making some cuts in December before he left office but left the rest up to Greitens.

In essence, the state’s revenue didn’t grow as much as initially estimated. One factor driving the tough budget situation is a decline in corporate income taxes, a consequence, in part, of Missouri’s franchise tax being phased out. 

Some Democrats zeroed in on Greitens’ decision to cut spending on higher education. In a statement, House Minority Leader Gail McCann Beatty, D-Kansas City said, “Weakening public education won’t grow Missouri’s economy or create jobs.”  And state Rep. Lauren Arthur, D-North Kansas City, noted in a Tweet that Greitens blamed Nixon's administration for the state's budget woes – but not the Republican supermajority that passed the document and supported tax cuts over the years.

It’s unclear if Nixon, had he made all of the withholdings before left office, could have spared higher or K-12 or higher education from significant cuts. House Budget Chairman Scott Fitzpatrick noted in November that making withholds this late in the fiscal year would be perilous, since there would be “fewer opportunities there are for restrictions because a lot of that money is already out the door.”

State of State looms

The budget announcement came roughly a day before Greitens makes his State of the State speech. A press release states that the governor will detail his plans “his plans for ethics, jobs, public safety, and education,” as well as “labor reform, tort reform, civil service reform, regulatory reform, tax credit reform, and other components of his plan to bring more quality jobs back to Missouri.” 

Missouri Speaker of the House Todd Richardson speaks to state representatives in 2016.
Credit File photo by Carolina Hidalgo | St. Louis Public Radio

But Greitens’ staffers announced weeks ago that the governor is forgoing the tradition of releasing his budget before the speech. Instead, he’ll release his proposed 2018 budget in February.

“He does not have the government experience, and so he needs more time,” said state Rep. Donna Baringer, D-St. Louis. “And I mean that from just knowing the process and how it works. Just like we have all these incoming freshmen [legislators]. If you’ve never done a floor debate, if you’ve never worked on legislation, it takes a minute or two to actually learn it.

Both Greitens and GOP lawmakers predicted that the 2018 budget would be challenging. Legislators can't do much to drum up new revenue, especially since Missouri’s constitution requires statewide votes to approve major tax increases. (Even without the constitutional curbs, Greitens or the GOP-controlled legislature are unlikely to back tax hikes anyway.)

The budget crunch could compel Greitens and the legislature to pare down popular tax credit programs, such as the historic preservation and low-income housing tax credits. But efforts to slim down those programs have traditionally run into political opposition. (And there’s no guarantee that any changes would make an immediate impact, especially since millions of dollars worth of tax credits have presumably not been redeemed yet.)

Still, House Speaker Todd Richardson says the atmosphere around tax credits have changed within the legislature – especially since an effort to reel them in back in 2011 failed in dramatic fashion.

“I do think there will be an appetite for tax credit reform across the board – and I think there’s an appetite for a broader look at what the state’s tax structure should be,” said Richardson, R-Poplar Bluff. “What we ought to do in terms of trying to reform tax credits is not always look for the big home run solution or the grand bargain. … When you take these issues in smaller chunks, you tend to have a better opportunity for success.”