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Government, Politics & Issues

Nixon faces moment of truth tonight

This article first appeared in the St. Louis Beacon, Jan. 27, 2009 - The moment of truth for Missouri's Gov. Jay Nixon comes tonight in his first state-of-the-state address.

After years of seeing holes torn in the safety net during the Blunt administration, the new governor gets his chance to put his own stamp on state government. He already has discovered, to his dismay, that providing all he has promised for higher education, economic development and social services, among other things, is more easily said than done.

At 7 p.m. tonight, when Nixon outlines his own budget and spending priorities for the 2010 fiscal year, it's a safe bet that many of his core campaign promises will be cast aside because Missouri is facing hard times with high unemployment and shrinking revenue to support services.

Look for the new governor to talk about how economic conditions have caused him to put some promises on hold, then mask the bad news about budget cuts with rhetoric about making state government more "efficient and effective."

"The question I have for a state-of-the-state address is how honest it will be," says political scientist Ken Warren of St. Louis University. "I think people expect cuts in services because of the economy. If he (Nixon) proposes not to do that, people will think he's not addressing reality."

Working with Republicans

But Nixon, a Democrat, may be ready to address Missouri's fiscal reality. Along with Sen. Gary Nodler, R-Joplin, who chairs the appropriations committee, and Rep. Allen Icet, R-Wildwood, who chairs the budget committee, Nixon has come up with a consensus revenue estimate for the 2010 fiscal year. The three project revenue to grow by 1 percent over '09.

But experience shows that even a modestly rosy scenario can be way off. Even a 1 percent level of growth may turn out to be elusive. Remember the '09 projections of 3.4 percent revenue growth? The adjusted figure now projects that '09 revenue will fall 4 percent from the previous fiscal year. That means '09 revenue is expected to be $542 million less than originally predicted.

At the same time, the governor might well sound a positive note, pointing to potential economic growth due to lower energy prices and his public-private initiative to create jobs in small businesses. In addition, expect him to point to potential relief from the economic stimulus package making its way through Congress, a package that Nixon hopes will speed up the economic recovery and make more jobs in Missouri.

All but forgotten in the governor's comments of late and perhaps tonight, too, is his promise to restore the Medicaid budget cuts imposed by former Gov. Matt Blunt. The idea seems to have morphed into a move to insure children. That means the new governor won't abandon the Medicaid promise altogether but will try to implement it in phases, beginning with a focus first on youngsters.

That much was hinted at following his appointment of Ronald J. Levy to head the Department of Social Services. In announcing that appointment, Nixon called Levy, former head of SSM Health Care in St. Louis, as the right team leader as the administration looks for "opportunities to cover more kids while making government as efficient, effective and responsible as possible."

Nixon, Nodler and Icet are patting themselves on the back for bipartisan cooperation. But the fact is that Nixon is not fully in control of the budget. That will be left to a House and Senate dominated by Republicans.

Two GOP lawmakers say outright what the governor has only implied: Cuts will have to be made because the budget has to be balanced. To Nixon, the recent revenue estimate agreed on by the three points to ideal bipartisanship, and he adds that just as Missouri families are tightening their belts, state leaders have an obligation to make "Missouri government more efficient and effective." Read that to mean spending cuts.

Nodler and Icet, on the other hand, were more direct, stressing the need for a budget that, in Icet's words, "must be constitutionally balanced" based on revenue projections in their agreed-on revenue estimates.

What the Republicans like about Nixon is his on-the-record comment that tax increases are off the table. But it's unclear whether Jefferson City might warm to the idea of taxing Internet purchases. The Missouri Budget Project points to a University of Tennessee study estimating that Missouri loses a minimum of $270 million and as much as $370 million in state and local revenue because it doesn't tax online purchases.

The Budget Project says it's sensible to pursue this option because Internet purchases continue to erode sales tax collections nationwide. The trend should concern lawmakers, the group says, because sales taxes make up a large share of state and local government funding.

Dire Consequences

Since Nixon hasn't weighed in on this option, the question for tonight isn't whether the governor will call for budget cuts but how much efficiency, as he calls it, he will try to wring from state spending. He has played his hand close to his chest, refusing to say much about what he will propose. But he's getting plenty of unsolicited advice from state agencies. They have already foretold the state of the state by laying out, at Nodler's request, the kinds of cuts the governor and lawmakers might have to impose.

Documents that Nodler's office provided to the Beacon show some far-reaching consequences of the senator's request for agencies to show him what would happen if agency budgets were reduced by at least 15 percent and as much as 25 percent. These documents were drafted when Blunt's people ran the bureaucracy, so priorities might change with Nixon in charge.

In any case, state agencies laid out tough choices. The Department of Social Services, for example, proposed to eliminate as many as 227 jobs, including as many as 129 field staffers. The consequences, it conceded, would include: an increase in caseloads and error rates; less money to shield women and children from domestic violence; a drop in child support payments; less funding for child care and crisis nursery programs; and loss of services for teens who can "fall prey to predators, drug addiction, prostitution or, in the extreme, death."

The Department of Elementary and Secondary Education says big budget cuts would probably include eliminating a state-funded program for gifted students, phasing out scholarships to college students who agree to teach in schools serving at-risk students and eliminating grants to set up alternative schools for violent, abusive or chronically disruptive students.

Higher education officials already have laid out potential adverse results from the possibility of budgets cuts between 15 percent and 20 percent. They predict layoffs, consolidation of programs, and hiring and salary freezes among others. In response, Nixon has thrown them a temporary lifeline by proposing that tuition be frozen for a year at public colleges and universities. But this go-it-alone gesture didn't set well with Nodler and some other GOP lawmakers, because the governor, Nodler and Icet had agreed they would work together on cuts and spending issues.

That mild disagreement may be merely a political bump that the three will overcome – or the first hint that the much-discussed bipartisan spirit will not last.

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