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Government, Politics & Issues

Nixon defends his action to 'withhold' state money from budget for disaster relief

This aricle first appeared in the St. Louis Beacon, Aug. 30, 2011 - Missouri Gov. Jay Nixon offered on Monday his first detailed defense of his decision to withhold $170 million from the budget for the current fiscal year in the name of disaster relief -- a move that's being challenged in court by state Auditor Tom Schweich.

Nixon noted that Missouri governors have engaged in "withholds'' for decades. Schweich says that tradition doesn't make the practice legal. That question aside, the auditor has emphasized that one of the differences is that Nixon then reallocated the money without getting approval of the General Assembly.

"Governors have always managed the budget in this fashion," Nixon said at a news conference in north St. Louis County that covered a range of topics. "I wanted to make sure that we were fiscally prudent with our dollars. Spending down your accounts to zero is not the way to start a fiscally prudent year."

(Click here to view some of the governor's comments.)

Nixon defended his action as necessary because A) Missouri's constitution requires a balanced budget, and B) legislators failed to approve a balanced budget last session.

"The legislature cooked into their budget a number of measures that did not pass," the governor continued. "For example, they put in tax amnesty, which was designed in their very budget to have dollars come in excess of $25 million. They didn't pass that bill. They gave appropriation authority without putting money in the bank. And they also expected additional money to come in through the lottery -- as well as gaming -- that has not come forward."

The governor added: "It's my job to make sure that with, the resources we actually have, we're able to meet the responsibilities we really have. And that's what I'm going to do."

Nixon, a Democrat, says the $170 million -- taken from various state programs -- is being redirected to pay Missouri's share of the necessary government spending in response to major disasters in Joplin, southeast Missouri and elsewhere.

Schweich, a Republican, sued the governor in Cole County Court last Friday, arguing among other things that the withholdings were unconstitutional and violated the state's separation of powers.

Governors have typically withheld money early in the fiscal years, which begin July 1. "Withholds" are different from budget cuts because the money can be restored later in the fiscal year if the governor determines that state income is adequate to do so.

Schweich said that traditional use of the practice doesn't make it legal. But his staff emphasizes that most previous governors, unlike Nixon, did not attempt to redirect the money they had withheld.

Nixon maintained that his "tight fiscal controls'' have helped Missouri maintain its AAA bond rating.

The governor rejected the proposal of some in state government, including Schweich, that the state's "Rainy Day Fund,'' which is rarely tapped, should be used to pay for disaster relief. Nixon said the fund actually represents Missouri's general cash flow, and that using the rainy-day money could threaten the state's bond rating.

Earlier Monday, U.S. Sen. Claire McCaskill, D-Mo., demurred when asked her opinion of the legal fight. McCaskill was state auditor from 1999-2007.

While declining to take a position on the "withhold'' battle, McCaskill noted that she was filing an "amicus'' brief on Schweich's behalf in connection with a separate legal battle over his office's authority to conduct performance audits.

During her tenure, McCaskill dramatically expanded the auditor's practice of conducting performance audits.

(Beacon political reporter Jo Mannies contributed information for this article.)

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