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Government, Politics & Issues

Nixon uses State of the State to press for Medicaid expansion, more education spending

This article first appeared in the St. Louis Beacon, Jan. 28, 2013 - Missouri Gov. Jay Nixon sought to confront Republican resistance to his proposed Medicaid expansion by promising in his State of the State address Monday night that he would support rolling back the expansion if the federal government cuts off the financial spigot to cover most of the costs.

“If Washington drops the ball, we’ll do what’s right for Missouri,” Nixon declared, attracting applause that – while muted – was stronger than the reception for much of his explanation of why the state needs to participate in the Medicaid expansion advocated in federal Affordable Care Act.

But perhaps mindful of the GOP objections, Nixon spent most of his annual State of the State address focusing on more palatable spending proposals, including:

  • $150 million in additional spending for public education, from preschool through college;
  • $12 million for more spending on programs to address mental illness treatment and intervention, as well as expansion of domestic violence shelters and related services;
  • $71 million to fund the state’s pension system for its employees fully and provide a 2 percent pay raise for all of them.

That spending for state employees would be offset, at least in part, by cutting the state’s workforce by 190 positions overall, mainly in state transportation and social service agencies.
Overall, Nixon is proposing a general-revenue budget of $8.28 billion for the coming fiscal year that begins July 1. The state House and Senate will draw up their own proposed budgets, which may or may not include what the governor has recommended.

The additional spending that Nixon is proposing signals better economic times for the state. Bipartisan income projections call for the state to take in roughly $200 million more in FY2014 than the current fiscal year.

Nixon also called for a major statewide bond issue, of unspecified size, to pay for critical improvements to Missouri’s public schools to create “first-rate, 21st- century facilities” as well as to upgrade state parks and to build “a new and improved Fulton state mental hospital.”

He sought to link the bond proposal to his longstanding, and so far unsuccessful, effort to trim and target the state's tax credit programs.

And he renewed his call for restoring Missouri’s campaign donation limits and resurrecting ethics mandates tossed out by a court more than a year ago.

In fact, the governor was well into the second half of his address before he brought up the topic – Medicaid expansion – that was clearly the elephant in the room.

He sought to first connect the matter to both parties’ overarching focus on job-creation issues by declaring, “The biggest economic decision facing our state right now is how to move forward on health care.”

House Speaker Tim Jones, R-Eureka, was unmoved. Delivering the official Republican response, Jones asserted that supporters of Medicaid expansion "want to take us down a fiscally irresponsible path that will saddle future generations of Missourians with a bill they cannot afford. It’s a path Republicans will not follow.”

Medicaid represents biggest budget change

As expected, Nixon’s new budget proposal includes $907.5 million in federal funds to pay completely for the first year of an expansion in Medicaid that would add an estimated 259,000 Missourians to the rolls during the first year – and an expected 300,000 when it is fully implemented.

Nixon and his budget team say the expansion actually would save the state about $47 million in the coming fiscal year because of related provisions in the Affordable Care Act tied to the expansion.

“This isn’t the time to re-open the debate or reargue the merits of the president’s health-care plan,” Nixon told legislators packed into the House chamber – most of whom were Republicans.

“I had some problems with it, and I know many of you did as well. But Congress passed it, the president signed it, and the Supreme Court upheld it. It’s the law of the land. And it’s not within our power to rewrite federal laws, even if we wanted to. It is within our power – it’s our responsibility – to now do what’s right for Missouri.”

A Democrat facing a GOP-controlled General Assembly, Nixon called for legislators to “put the politics of health care aside for just a moment and look at this as a business decision for the state of Missouri.”

“The Missouri Chamber of Commerce supports the Medicaid expansion – not because they’re big supporters of this president and his agenda – but because it’s the smart thing to do,” the governor said. “They know that bringing billions of dollars back to Missouri is good for our state’s economy.”

Under the expansion, the federal government would pay all of the additional costs for the first three years. Missouri would then pick up a phased-in portion of the costs, but no more than 10 percent.

“Moving forward with this plan will bring a total of $5.7 billion (in federal money) to Missouri for the first three calendar years – at no additional cost to the state,” Nixon said.

The ACA calls for states to increase their Medicaid rolls to people earning up to 138 percent of the federal poverty level. That amounts to a Missouri family of four with an annual income of about $32,000, according to the governor’s staff.

“Let’s be clear about who these people are,” the governor said. “They’re working Missourians – folks who work day and night but simply can’t afford health coverage.”

Missouri currently has among the strictest Medicaid eligibility standards in the 50 states, with most adults restricted to earning no more than 19 percent of the federal poverty level -- or about $2,700 a year. 

Under a GOP-controlled General Assembly and a Republican governor, Matt Blunt, Missouri trimmed or eliminated benefits for about 300,000 people in 2005. Since then, the GOP has seen any expansion as a rollback of the 2005 actions.

Among other things, Nixon emphasized the job-creation argument: “The University of Missouri estimates this will generate an additional 24,000 jobs – and that’s just in 2014. We’re talking about good jobs – for nurses, doctors, pharmacists, therapists and medical technicians.”

Calls for more spending on education

The Medicaid expansion represents most of the spending increase in Nixon’s proposed budget for the coming fiscal year.

But Nixon attracted more applause during the first 10 minutes of his address, when he focused on more than $150 million in proposed increased spending on education, including:

  • $18.5 million more for various early childhood programs, including First Steps and Early Head Start;
  • $100 million more for K-12 spending, including $65.9 million more for the state’s “foundation formula” that allocates most of the state aid, $32.5 million from the Proposition C sales tax, and $8.8 million for special education for children with disabilities;
  • $35 million more for higher education, most of it linked to “improved outcomes.” About $1 million is for expanding the state’s A-plus scholarship program for community colleges.

“Our children are our first priority. They are Missouri’s future,” the governor said. “Of course, with increased funding, come higher expectations. We expect better test scores, better graduation rates, more college degrees and more Missourians ready to compete for the best jobs in a global economy.
“We’ve all got to do better, and that means everybody: students and teachers; parents and principals; coaches and college presidents. Increased funding means increased accountability.”

Nixon also came out for a longer school year: "Right now, Missouri has the fourth-shortest school year in the nation. Adding six more days to the next school year will give teachers more time to work with their students, and give kids more time to learn."

During the GOP response, some Republicans appeared cool to the idea of lengthening the school year. Some businesses that rely on student employees during the summer months have signaled their opposition.

Lea Crusey, Missouri state director for StudentsFirst, a nonpartisan effort to improve public education, generally praised Nixon's proposals. "Moving forward, we must hold high expectations, for we know that every child – regardless of zip code or demographic – has the ability to achieve at high levels. With this in mind, we urge leaders in Jefferson City to prioritize transformative reforms that pave the way for public schools to thrive and empower Missouri parents to have a voice in their child's academic success."

Curbing tax credits, campaign donations

Nixon reaffirmed his longstanding effort to cut back on the state's tax credits, which he said cost the state $629 million during the last fiscal year.

That sum, said Nixon, equaled 1/12th of the state's general revenue budget and was "not fiscally responsible."

"We can only move forward with a bond issuance if we have a way to pay for it," the governor said. "The way to pay for the bond issuance is to finally get our tax credit system under control. This is the year to get comprehensive, fiscally responsible tax credit reform legislation to my desk, and get smart, strategic investments in our state moving forward."

The governor concluded his address by then tying it to the cynicism that some Missourians, regardless of their political views, have in the political process.

"Missouri’s ethics laws are among the weakest in the nation," he said. "Every year as governor, I’ve put forward my agenda for ethics reform, and I know many of you have made genuine efforts to pass legislation."

The most important action, Nixon declared, was the restoration of campaign donation limits, which were eliminated in Missouri in 2008.

He called the current lack of donation limits "the single most destructive force to our system."

"Each time a wealthy individual or business or special interest sends a check for $20,000 or $50,000 or $100,000 to a candidate, the public’s trust erodes a little bit more. And eventually, if we continue on this path, there will be no trust left at all," Nixon said.

He recalled his efforts as attorney general to advance and defend state campaign donation limits in the 1990s. "This year, if the legislature does not send a campaign contribution limit bill to my desk, I will do everything in my power to get it on the ballot and make sure it passes," Nixon said.

The Missouri Republican Party swiftly countered with a statement blasting Nixon's record of accepting millions of dollars in large contributions since the limits were abolished. The governor previously has said that he has no choice as long as there are no limits.

During his address, as in his Jan. 14 inaugural speech, Nixon sought to avoid taking any direct verbal shots at Republicans.

He concluded Monday by declaring he has "always been mindful of, and inspired by, the words inscribed on the Great Seal of Missouri, on our flag and in these marble halls: 'Let the Good of the People Be the Supreme Law.' ”

"Let every action we take in these halls and in the offices of government be guided by that supreme law: the good of the people."

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