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Government, Politics & Issues

Legislature passes budget with provisions raising Nixon's ire

This article first appeared in the St. Louis Beacon: Missouri lawmakers finished work on the bills that encompass the state's budget, sending the 2014 fiscal year plan to Gov. Jay Nixon a day before a mandated deadline.

But the bills passed by the legislature include several provisions that have raised the governor's ire, including partial funding of the Department of Revenue's Division of Motor Vehicles.

The proposed $24.8 billion budget includes $8.28 billion in general revenue, or funding that isn't directed toward specific purposes. That's an increase over the roughly $8.01 billion appropriated for fiscal 2013.

Some highlights, according to House Budget Chairman Rick Stream, R-Kirkwood, include:

  • Roughly $66 million increase for the state's foundation formula funding public schools.
  • $2.4 million increase for Bright Flight scholarships.
  • An across-the-board pay increase for state employees.
  • $4.2 million for the state's arts council.
  • $1 million for tourism funding.
  • $10 million to expand the University of Missouri-Columbia medical school in cooperation with CoxHealth in Springfield.

"We had a great process with the appropriations committees," Stream said. "They basically took my charge, which was to find lines that could be reduced or eliminated, work with the departments to see where we could provide more services to the people of the state. And they did good job of that. My discussions with the Senate chairman and his staff were excellent. We had some disagreements, no question about it. But I can't think of anything that was that difficult. It's a long, gut-wrenching process."
Added Senate President Pro Tem Tom Dempsey, R-St. Charles: "It's been a long slog dealing with the significant budget shortfalls over the past several years. Our prudent budgeting has allowed, in part, for these opportunities in new investments and our top priorities in education."

The budget process was slowed down considerably on Thursday in the Senate because of provisions that appeared to make the governor choose between a program to help low-income elderly renters, and early childhood and health-care programs.

The final budget, in effect, eliminates a tax credit for low-income elderly and disabled people who rent their homes, which is part of a "circuit breaker" tax credit. The credit to renters has cost the state about $55 million annually in lost revenue.

The budget reallocates the $55 million into a new "Missouri Senior Services Protection Fund," but then uses some money for the existing First Steps program for early childhood education for children with developmental disabilities, with the rest to be directed to clinics that treat poor people and to a program providing health care to the blind.

Earlier Thursday, before the House vote, Nixon issued a statement objecting to the plan, saying it was pitting the elderly against disabled children. The governor said such a move was unnecessary and noted that the House had just last week earmarked $38 million in the new budget to purchase a building near the Capitol and to use it as offices for legislative and state workers now working in the Capitol.

Nixon had supported changing the circuit breaker program earlier this year. But the governor announced in April that he wouldn't support changing the "circuit breaker" tax credit without broader changes to tax credit programs. 

The way the budget was crafted was aimed at forcing the  governor either to sign legislation to eliminate the circuit breaker for elderly renters, or risk not funding the early childhood and health-care programs.

That prompted some senators -- including state Sen. Ryan Silvey, R-Clay County, and several Democratic members of the chamber -- to filibuster the budget until that arrangement was changed. 

The House ended up sending the bill changing the circuit breaker program, known as HB350, to Nixon by a vote of 91-69.

House Budget Chairman Rick Stream and Senate President Pro Tem Tom Dempsey talk about the circuit breaker conflict.

Dempsey told reporters that, if Nixon vetoes HB 350, the Senate has an alternative plan to set up the Senior Services Protection Fund as an amendment on a different bill, and then allocate money from the fund for First Steps.

"In my discussions with Sen. Silvey and the budget director, there's a couple of bills next week where, to allay anyone's concerns that we have any interest in cutting First Steps, we provide some statutory language to create a Senior Protection Fund and that there be a general revenue transfer into that fund," Dempsey said. 

Asked about that Senate plan, Stream said he's "not aware of any deal or any type of arrangement like that whatsoever."

"We passed our budget the way we planned to pass it," Stream said, referring to the House. "Everything went as we planned it. We had a good, healthy debate on all of those issues, how we put the money into the Senior Services Protection fund. In the Senate, I know that they had some debate over there and a filibuster. But they passed all the budget bills, too."

House Majority Leader John Diehl, R-Town and Country, said the "House and the Senate have done their job to pass the funding sources that the governor used to build his budget."

"I'm perfectly comfortable with the way we've passed our budget," Diehl said. "It's the governor who created this problem."

But several Missouri groups who advocate for the elderly and the disabled are blasting the General Assembly for linking aid to the elderly and the disabled to assistance for disabled children, and then trying to force the governor to choose which group gets the aid.

In a joint statement, the Missouri chapter of AARP, Paraquad Inc. and the Missouri Budget Project contended, "The Missouri House’s vote tonight to raise taxes on nearly 105,000 vulnerable Missouri seniors and people with disabilities by eliminating a modest tax credit that is critical to keeping them in their homes is not only unnecessary, but cruel."

The groups noted that the state government expects to end this fiscal year with a surplus. “It really adds insult to injury when there is money available to fund both" the circuit-breaker tax credit and First Steps, said Amy Blouin, executive director of the Missouri Budget Project.

Lawmakers sound off on Nixon layoff threat

Another controversial part of the budget was a cut to the Department of Revenue's Division of Motor Vehicles.

Budget negotiators from the House and Senate agreed to a version of the state's budget for the coming fiscal year (FY2014) that includes only eight months worth of funding for the Division of Motor Vehicles, in effect a one-third cut of its annual budget. That decision reflects Republican criticism of the new method in which the Department of Revenue issues driver's licenses. 

Stream said that the plan was to restore the rest of the funding during the early part of the 2014 legislative session. 

"If the department had agreed to comply with the guidelines that the House laid down for them in terms of scanning and retaining documents, they would get their [full] year's funding in the supplemental," Stream said.

Senate Appropriations Chairman Kurt Schaefer, R-Columbia, said on Wednesday that those guidelines include going back to issuing driver's licenses at fee offices, as opposed to the new method of having the licenses processed by a firm in Georgia, and then mailing them out to applicants.

But Nixon announced on Wednesday that the state's budget cannot be handled in such a fashion. If the General Assembly cuts the budget for the Division of Motor Vehicles by one-third, he said he will be forced to reduce the division's staff and services.

The House approved the budget bill containing that provision by a 108-52 vote, one vote short of a veto-proof majority.

Some GOP legislators sharply criticized the governor. Rep. Jay Barnes, R-Jefferson City, called the governor's statement "disgusting," "dishonest" and "deplorable."

"Make no mistake, if those jobs are cut, that decision lies on the governor's desk," Barnes said. "And he shouldn't be making those threats."

But some House Democrats say Nixon had no choice but to lay off staff and curtail services, arguing that the governor's administration must plan on a 12-month cycle of how it funds departments.

"It funds this department for two-thirds of its existing budget," said state Rep. Jeff Roorda, D-Barnhart. "What the governor's doing is trimming back certain expenditures if we're going to maintain this position. And he's saying 'I can't trust that we're going to fund this department and not have a Department of Revenue for the last four months of the budget.'"

State Rep. Jill Schupp, D-Creve Coeur, called the GOP budget move "an inappropriate and immature way to go about making public policy."

"Yes, people want an investigation," Schupp said. "And on both sides of the aisle, we need to understand why those documents were scanned, why they were passed on and whether that was appropriate. And currently we have varying beliefs on that. But we will find out eventually because there are people committed to making sure that we do. But let's not utilize the budget as a tool to undermine the operations of the state of Missouri to make a political point."

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