January 13, 2006

The Missouri General Assembly began its second week of the 2006 legislative session this week.

The House Budget Committee and Senate Appropriations Committee initiated organizational meetings to review department budget.

Governor Blunt delivered his long awaited State of the State message. He outlined priorities and his spending plans for the state budget.

This week's developments include:

Opponents of Medicaid Cuts Return to Capitol
Missourians hoping the Legislature does not make more cuts to the Medicaid program take their concerns to the Senate Appropriations Committee - asking, in fact, for restoration of some programs. One of them is Kansas City-area resident Sharon Aller, who used to get help for her mental and physical ailments through the Medical Assistance for Workers With Disabilities Program. That program was eliminated last year. She tells the panel she wants to be a productive member of society, but the Legislature's cuts to programs that help her have made life much harder for her and others like her.

Seniors Signing Up for Medicare Prescription Drug Benefit

Pharmacies throughout the state have started filling prescriptions under the new Medicare drug program. Medicare officials have seen a flurry of activity in recent weeks as senior citizens sign up for the federal prescription drug program. Tom Lenz, the Missouri Administrator for the Centers for Medicare and Medicaid Services, says enrollees need a few pieces of basic information to ensure they're going into the right program that covers their prescription needs. Once a person signs up for the benefit, he or she is covered - even if that person needs drugs and hasn't yet received a prescription drug card. Any costs incurred can be reimbursed once the card arrives in the mail.

Smoking Cessation

Governor Blunt proposed $1 million for tobacco prevention programs. Although this represents a very small amount of funding from the tobacco settlement at least it is a step in the right direction.

Budget Provides Little Hope for Medicaid Recipients

It appears Governor Matt Blunt is offering no hope to Medicaid recipients who have lost funding for wheelchair batteries and Nebulizers, among other things. Nebulizers are devices that deliver medicine to people with lung ailments. Funding for those things was cut off by the Legislature last year. Bolivar pharmacist Brady Vestal has told the Senate Appropriations Committee the actions create inconsistencies and - instead of saving money -increase costs. He says people are still allowed to get Nebulizers - in emergencies. The trouble is: the state has no definition of "emergency." He has asked the Senate Appropriations Committee to put money in the state budget to straighten out the problems with Medicaid.

Healthcare Technology

A Healthcare Technology Fund was established with $25 million dollars. According to the Governor’s comments, the fund will explore new and innovative ways for technology to improve the delivery of care, reduce administrative burdens and eliminate waste and fraud. Programs funded with the money will emphasize personal responsibility and create a structure to help Missourians make informed healthcare decisions.

Competing Groups Reach Compromise on Tobacco Tax Initiative

A compromise has been reached between the two organizations that had launched competing tobacco tax ballot initiatives. The Committee for a Healthy Future had begun collecting signatures with the primary aim of raising money for anti-tobacco efforts. The Alliance for Health and Justice kicked-off its campaign with a proposal to use some of the money raised for the anti-tobacco cause, but with the bulk of the tax money used to restore Medicaid cuts. Under the new proposal, a 4-cent tax would be added to every cigarette sold in Missouri, with a 20 percent increase on all other tobacco products. 17.5 cents of every dollar collected would be used for smoking prevention, education, and cessation. 82.5 cents of every dollar raised would provide Medicaid and other health services to the poor. Approximately 150,000 signatures will be needed to put the issue on the November ballot.

Governor's Message

Governor Blunt delivered his State of the State address this week and with state revenues on the increase approximately $245 million; he had some good news for some programs in the FY07 budget. Some of the Governor’s recommendations include:

 EDUCATION

• $137.2 million increase for the foundation formula, including $15 million for the new
  Small Schools Program.

• $1.8 million increase for the A+ Schools Program.

• $1 million increase for the Parents as Teachers Program.

• $33,006 for a children’s summer reading program.

• $17.1 million increase for Missouri’s public two- and four-year colleges and universities.

 CHILDREN:

• $146.3 million for Missouri’s State Children’s Health Insurance Program, which includes a $10.4 million increase.

• $200,000 for youth mentoring.

• $1 million for the Department of Health and Senior Services tobacco prevention program. The $1 million comes from the Healthy Family Trust Fund -Tobacco Prevention Account, which receives its money from the tobacco Master Settlement Agreement and any future settlements from additional participating tobacco companies.

• $6.4 million to fund rate increases for residential care facilities that provide for children in the care of the departments of Mental Health and Social Services.

• $2.6 million to establish a Child Support Call Center to streamline the structure and workflow for the enforcement of child support obligations.

 JOBS IN MISSOURI:

• $38.5 million from the state’s tobacco Master Settlement to expand life sciences in Missouri.

• $394,457 for additional staff for the sales and finance teams, which are a part of the re-organization of the Department of Economic Development.

• $10 million for the Jobs Retention Training Program.

• $4.5 million for additional tourism programs to promote travel to, and within, Missouri.

• $2.5 million for the Promote Missouri Program to advertise the benefits of doing business in Missouri.

• $150,000 to create new Innovation Centers around the state.

• $1 million for port capital improvements.

 IMPROVING THE HEALTH OF MISSOURIANS:

• $6 billion for Missouri’s Medicaid Program. An additional $658.1 million new funding; this includes $275 million additional state general revenue dollars.

• $6.1 million emergency supplemental to fund Missouri’s Utilicare program which provides assistance with heating costs to elderly, disabled, and low-income families.

• $25 million in state funds to establish a Health Care Technology Fund that will support projects to explore new innovative ways that technology can improve the delivery of care, reduce administrative burdens, and address fraud, waste, and abuse.

• $100,000 to investigate Medicaid fraud. Governor Blunt has directed the Department of Social Services to contract with a private agency to verify and investigate selected Medicaid cases.

• $700,000 to establish and expand Community Health Centers in Hannibal, Jefferson City, Naylor and Poplar Bluff. This will bring state funding for these centers to $8.7 million.

• $2.4 million for the AIDS Drug Assistance Program which provides medication to persons who are HIV positive. Early treatment is important as it reduces the spread of disease to others, and decreases the number of AIDS cases and deaths by stopping the progression of the disease. This will increase funding for the program to $16.1 million.

 ELDERLY & DISABLED:

• $27 million to provide a $1 per hour rate increase to ensure quality care is being delivered to individuals receiving in-home services. This increase, combined with other executive new decision items, will bring funding for the in-home services program to $416.7 million.

• $44.2 million to cover prescription drugs for 150,000 elderly and disabled individuals who qualify for Medicare, and $20.6 million to cover increased pharmacy costs for elderly and disabled clients through the Medicaid Program. These two items bring the Medicaid Pharmacy Program to $661.8 million.

• $50,000 for a senior center in Worth County - the only Missouri county without a senior center.

• $16.1 million to serve additional seniors through the Department of Health and Senior Services’ meals program. This will bring funding for Area Agencies on Aging to $47.9 million, which is primarily used for congregate and home-delivered meals.

• $2.6 million and 48 staff to increase the inspections of Missouri nursing homes and residential facilities. This will bring total funding to $5.5 million.

• $2 million to fund the Homestead Preservation Tax Act which gives a tax credit for qualified senior citizens and disabled taxpayers providing relief from burdensome increases in local property taxes.

• $1.4 million to increase monthly Blind Pension benefits from $510 to $541 per month.

• $1.1 million for the Senior Nutrition Program, which will provide increased funding for congregate and home-delivered meals.

• $531,340 to increase funding for Alzheimer’s services administered by the Department of Health and Senior Services.

• $300,000 to administer the New Freedom Program to provide public transportation services for persons with disabilities.

 CRIME PREVENTION:

• $500,000 to update Missouri’s mitigation plans for eliminating or reducing long-term risk to human life and property from natural and technological hazards, and bring Missouri up-to-date and eligible to receive all available federal disaster assistance.

• $9 million for the third and last year of a phased-in pay increase for Missouri’s state Highway Patrol troopers.

• $2.4 million and seven staff for the first phase of an upgrade for the Southwest Missouri Crime Laboratory in Springfield. When the lab is fully staffed in Fiscal Year 2009, the state’s investment will be $1.75 million annually for ongoing lab operations.

• $1.3 million to upgrade vehicle safety features on state Highway Patrol vehicles with fire suppression systems, side impact air bags, and safer radio racks.

• $753,491 for the new Missouri Information Analysis Center, which will serve as a central base for intelligence sharing and analysis among law enforcement and emergency personnel at all levels of government.

• $396,465 for emergency warning equipment for vehicles used by Highway Patrol officers, including those assigned to the Gaming Commission.

• $300,000 for equipment upgrades for the state’s Highway Patrol crime labs. This equipment will identify substances used in drug cases.

• $200,000 for a new armored vehicle for the Special Emergency Response Team.

• $144,000 to support the DWI tracking system and Fatality Analysis Reporting System.

• $100,000 for investigative funds to help bust drug dealers across the state.

• $58,500 to provide ongoing flight training for the Highway Patrol’s pilots.

• $49,600 for new tactical entry vests for the Special Emergency Response Team.

• $350,000 for a law enforcement center at Lake of the Ozarks State Park.

 AGRICULTURE:

• $5.3 million to support bio-diesel production payments anticipated in Fiscal Year 2007.

• $625,000 for the Ethanol Producer Incentive Fund to support ethanol production and maintain current efforts to fulfill commitments made in previous years. This brings total funding to $8.6 million.

• $483,000 to support boll weevil eradication efforts for Missouri’s 483,000 acres of cotton.

• $15,000 to enhance Missouri livestock exports through a Quality System Assessment Programs that will verify cattle origin and age for foreign market buyers.

 CORRECTIONS:

• $1.6 million to open additional community supervision centers to support the Department of Corrections’ efforts to manage the prison population efficiently and effectively. This increase brings total funding to $3.5 million.

• $2 million for renovations needed to open two new sexual offender units.

• $1.9 million to address increasing commitments by the courts to the Biggs Maximum Security Unit at Fulton State Hospital.

• $1.7 million to operate an additional treatment unit to confine sexual offenders.

• $2.1 million for the continuation and expansion of existing Missouri Drug Courts to assist offenders with rehabilitation and address the root cause of problems that contribute to criminal activity.

• $252,019 for the Department of Corrections to implement the satellite tracking of 30 high-risk, repeat sexual offenders.

• $120 million in bond proceeds to build a new women’s prison to replace the Chillicothe Correctional Center for Women.

 VETERANS:

• $2 million for overtime costs to ensure quality care to the veterans residing at Missouri’s seven veterans’ homes.

• $1.5 million for increased pharmaceutical and other costs at veterans’ homes.

• $831,854 to provide a pay adjustment for critical nursing staff working in veterans’ homes.

• $115,391 for the Veterans Service Officer Program to provide additional staff that will assist Missouri veterans in accessing benefits provided through the federal Department of Veterans Affairs.

• $200,000 for the Missouri Military Family Relief Fund to help provide for the financial needs of families of the Missouri National Guard and Reservists on active duty.

• $1.9 million to maintain security at Air National Guard bases in St. Joseph and St. Louis.

• $304,080 to support National Guard armories for St. Joseph and Fort Leonard Wood.

• $99,992 to provide start-up costs for the new armories located in Dexter, Pierce City, and an addition at Chillicothe.

• $82,820 to ensure ongoing funding to staff the Veterans’ Ombudsman Program.

  TRANSPORTATION:

• $405 million additional funds for road and bridge construction and maintenance.

• $5 million for additional federal Transportation Enhancements Program funds. These funds can be used to enhance the appeal of Missouri by increasing the number of sidewalks, bike lanes, and trails. This brings total program funding to $20 million for Fiscal Year 2007.

• $2 million for the Safe Routes to School Program.

• $1.9 million for the Small Urban and Rural Transportation Program, which will provide more access to public transportation in non-urbanized areas and support to small city transit systems.

• $400,000 to maintain daily, round-trip passenger rail service between St. Louis and Kansas City.

• $382 million available from Amendment 3 bond proceeds to be used for road and bridge projects.

  ENVIRONMENT:

• $1.6 million to enhance water resource assessment and monitoring statewide, ensuring the safety and quality of the state’s water.

• $1.1 million to enhance voluntary regulatory compliance through initial customer assistance visits.

• $286,638 to determine applicable water quality standards for selected bodies of water throughout the state.

 STATE WORKFORCE:

• $93.6 million for a four percent pay raise for all employees.

• $38 million to continue to provide the state’s share for health insurance coverage for state employees.

• $11.9 million to provide an adjustment for critical state positions with high turnover rates that are the most difficult to fill, including corrections officers, nurses, and certain state law enforcement officers.

• $9 million for the third and last year of a phased-in pay increase for Missouri’s State Highway Patrol troopers.

Further Reductions from State Agencies May Be Necessary

While there is an unexpected increase in revenues that allowed for some funding increases the Office of Administration warns the list of expected supplemental needs is already larger than the $50 million set aside for that purpose. Some large adjustments ($30 million for further implementation of Amendment 3, $38 million for implementation of HB 688 of 2003, and pending debt payments on revenue bonds sold in Fiscal Year 2003) will result in very little discretionary general revenue spending. OA is expected to ask for more core as more supplemental needs and economic developments arise, therefore they are asking departments to expect some requests for further core reductions. They are asking all state agencies to look for ways to streamline services and administrative functions to reduce costs. Agencies are directed to review their core budgets and make recommendations to eliminate programs that are ineffective. They have also been asked to identify any new items that represent an “investment” that would generate returns, savings, or create cost avoidance.

The House and Senate

The House should start their budget process by marking up the Governor’s recommendation for approval to send to the Senate. The Senate Appropriations Committee held hearings this week to hear public testimony. The real mark up work in the Senate won’t begin until the House’s passes the budget bills.

Next Week

The Senate has adjourned and will convene at 12:00 p.m., Tuesday, January 17, 2006 (for purposes of bill referral). The full Senate will convene at 4:00 p.m. The House has adjourned until 4:00 P.M., Tuesday, January 17th, 2006 There will be no session on Monday, January 16 in observance of the Martin Luther King, Jr. holiday.

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