Politics & Issues
5:13 pm
Thu December 19, 2013

Nixon, Legislative Leaders Battle Over State Budget Estimates

(Updated 1:20 a.m. Friday, Dec. 20)

Missouri legislative leaders and Gov. Jay Nixon are disagreeing on what revenue estimates should be used in drawing up the state budget for the coming fiscal year – an argument that could affect the General Assembly’s deliberations when it goes back into session in a few weeks.

But the specifics of the budget dispute aren’t clear because most of the parties involved are commenting only through press releases and offering -- at least so far -- few additional details.

Missouri Capitol building
Missouri Capitol
Credit (St. Louis Public Radio/Marshall Griffin)

The state House and Senate budget chairs – state Sen. Kurt Schaefer, R-Columbia, and state Rep. Rick Stream, R-Kirkwood – lobbed the first shots Thursday afternoon when they jointly accused the governor’s office of projecting “unrealistic’’ growth in the state’s income.

Later, House Speaker Tim Jones, R-Eureka, and several House committee chairs also criticized Nixon and his staff.

Stream and Schaefer said in a statement that their offices have agreed to lower the projected increase for the current fiscal year’s budget (FY2014) to 2 percent, while projecting growth of 4.2 percent for the fiscal year (FY2015) that begins July 1.

The current budget was drawn up with estimated growth of 3.1 percent, but the state's monthly income has been lower for several months.  State Budget Director Linda Luebbering previously said that lower collections may result in the state using the surplus from the previous fiscal year (FY2013) to cover the shortfall.

The General Assembly spends much of its time every session putting together a budget, usually after the governor releases his proposed budget during the annual State of the State address. In early December, all parties meet privately to reach an agreement on basic budget numbers -- primarily, how much the state should expect to collect in income from taxes and other sources.

Schaefer and Stream noted that “experts from the University of Missouri economics department” helped in developing the revised estimates, along with Nixon’s budget office.  The legislators said the governor’s staff initially agreed with the numbers – 2 percent for this fiscal year and 4.2 percent growth for the next – but then “changed course and made demands that the estimates be increased to levels (that)…cannot be supported by realistic economic projections.”

Luebbering referred press queries to Nixon’s office, which didn’t divulge the specifics of what his office was proposing in projected revenue growth. Instead, the governor issued a statement that focused on his general approach in drafting a new budget.

“As I have every year, I will propose a fiscally responsible budget that protects taxpayers and funds core state services,” Nixon said. “This week's jobs report showing Missouri employers adding 15,000 jobs and our unemployment rate dropping to 6.1 percent demonstrates Missouri's continued solid economic growth. With our economy picking up steam and our unemployment rate continuing to drop, we have a unique opportunity to build on this momentum by making additional investments in our students and schools.”

Meanwhile, Stream and Schaefer contended in their statement that the governor was being too generous in his projections. That could lead to financial troubles, they said. The Missouri constitution requires that state government end each fiscal year with a balanced budget and gives the governor broad powers to cut spending to comply.

Such powers have touched off disputes between Nixon, a Democrat, and Republican legislative leaders – most recently over his decision to withhold money from the FY2014 budget that was to be used to pay for repairs at the state Capitol and to purchase a new office building for legislative staff. 

Schaefer and Stream contended that Nixon now “has decided to play political games rather than support sound, responsible economic policy.”

“The governor has spent the last two months promising more money to everyone that stops by his Capitol office, so it’s no surprise that he was willing to walk away from the process by which the state predicts economic growth,” said Stream. “We had a number that I thought that everyone could live with.  Once again, the House and Senate will have to be the adults in the room and write the budget based on the data we have available.”

Schaefer added, “I am disappointed in the governor's administration for backing out of the consensus revenue estimate….Overspending and waste are common in Washington, D.C. but have no place here in Missouri.”

Later, House Speaker Jones contended that Nixon was pressing for "an unreasonably high revenue estimate to support increased government spending."

Jones went on to accuse Nixon of seeking "to politicize what is typically a nonpartisan event."

Jones contended that if Nixon turns out to be correct, and revenues do come in higher than legislators estimate, "the answer is not to randomly spend more money, as Governor Nixon suggests, but to send it back to taxpayers in the form of a much needed tax break. "