Fri June 28, 2013
Nixon Freezes $400 Million From State Budget
Updated at 4:55 p.m. with quotes from Gov. Nixon, Budget Dir. Luebbering, and several GOP legislative leaders.
Citing concerns that lawmakers will override his veto of an income tax bill, Governor Jay Nixon (D) announced today that he's frozen more than $400 million in spending from the state's budget for next year.
Nixon made the announcement while signing the $25 billion spending plan, which takes effect on Monday. The cuts are in education, capital improvements, and other state services. The money being held back includes more than $66 million for K-12 schools. The Governor says the temporary cuts will become permanent if GOP lawmakers succeed in overriding his veto of their tax cut proposal.
"The choice before us is stark and clear," Nixon told reporters. "Members of the General Assembly can either support House Bill 253 or they can support education, but they can't do both."
Earlier this month, Nixon vetoed a Republican plan that phased in a deduction in the business income tax over five years. The measure also reduced the income tax rate for individuals and corporations over the next decade.
In addition, State Budget Director Linda Luebbering said the $400 million in cuts includes cancelling pay raises for state workers, as well as eliminating state jobs.
"We don't have specifics on that, and won't for quite some time," Luebbering said. "I'll be working with the departments to develop a plan to cut another 1,000 positions out of state government."
The cuts also include the entire Medicaid provider rate increase of nearly $46 million dollars. Luebbering says it's possible some cuts could become permanent even if the tax cut veto is not overturned, but she told reporters that the Governor would restore the K-12 funding as soon as possible.
The full list of the $400 million withholds, along with the line-item vetoes also announced by Governor Nixon, can be viewed here.
Republican lawmakers are calling the Governor's actions both unconstitutional and a political stunt. Here are some of their responses:
Mo. House Speaker Tim Jones (R, Eureka):
This is nothing more than a politically-motivated stunt that places Missouri families and children at risk by needlessly cutting critical education funding in an attempt to generate controversy over a common sense tax reduction bill for all Missourians. I am deeply disappointed that the governor would attempt to make Missourians his pawns in a game of political chess as he tries to force the hand of the legislature.
Mo. House Budget Chairman Rick Stream (R, Kirkwood):
In the past six months, Governor Nixon has purchased a brand new airplane, vetoed a tax cut for Missouri taxpayers and businesses, and is now going to cut funding to schools, farmers, state employees and healthcare for Missourians. While the Governor is flying around on his new plane, Missourians are going to suffer. These withholds cannot even be taken seriously with the revenue growth we are experiencing.
Mo. Senate Appropriations Chairman Kurt Schaefer (R, Columbia):
At a time when our state is just beginning to show signs of economic recovery, the Governor is going to make a series of devastating withholds to education while denying Missouri citizens the same tax breaks he has supported for our state’s largest corporations.
Mo. Sen. President Pro-tem Tom Dempsey (R, St. Charles):
I am disappointed to learn the governor is playing politics in his withholding of $400 million in appropriations that were to be used for education, capital improvements and vital state services. There is absolutely no reason or need to withhold revenue. To date net General Revenue is up 10.2 percent over last year...using the withholdings to prevent a possible veto override of House Bill 253, which would lower our tax burden, is overstepping and holds the people hostage with their own money.
Mo. House Budget Vice Chairman Tom Flanigan (R, Carthage):
The Missouri Legislature presented a balanced budget to the Governor and I find it irresponsible for the Governor to hold critical funding for the most vulnerable in society hostage over the assumption he will not get his way on a particular policy. And while this game plays out, there will be people impacted immediately by withholding these funds.
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