January 30, 2009

The General Assembly, state agencies and others listened closely to Governor Nixon’s State of the State address Tuesday evening.

The Governor is counting on a influx of funding from the federal stimulus package to shore up the state budget deficit and to deliver on his priorities to expand healthcare, create jobs and not reduce higher education spending.

The federal package looks to be $800 million to $1.2 billion for Missouri. On Wednesday, Linda Luebbering the new Director of Budget and Planning made a presentation to the Senate Appropriations Committee.

Needless to say all eyes are focused on the budget.

The State of Missouri faces a $282 Million dollar shortfall for 2009 and the Governor has asked for a supplemental request for 2009 of $146.6 million.

In addition, the Governor recommends supplemental cuts of $84 million for 2009. This includes:
            -Hold on long-term contracts for state agencies
            -Review of 2009 Capitol Projects
                        Delay or Cancel
                                    Lewis & Clark Discovery Initiative Funds
                                    Capitol Improvement Projects
            -Cut the size of Administrative Staff

In his supplemental 2009 Recommendation, Governor Nixon has recommended:
            $7.4 million Governor's SCHIP program
            $20 million Medical Assistance
           
In the 2010 budget the Governor’s office is projecting funding from Federal Stimulus-$805 million (distributed over a 21 month period)

Also in the 2011 budget an additional $11 million will be distributed over a 6 month period to help cover the inflationary cost of Medicaid

Nixon emphasized NO CUTS to Medicaid as part of his campaign platform. A recommended expansion on Health Insurance to 27,000 children through an increase in the SCHIP program.

Nixon is requiring Expenditure Reductions from all Departments. This includes:
            1,329 less staff-$107 million
            Travel Expenses-$63 million
            Programs-$85 million

Among the 2010 Increases:
            $33 million Caring for Missourians
            $4 million Job Training
            K-12 Full Funding Foundation Formula using Prop A money ($108 million)
            $24 million to Shelter Workshops      

The biggest disagreement between the Senate and Budget office centered around the concern and the way the stimulus monies would be accounted for in the Budget.

The Governor's office wants the stimulus monies to go directly into the General Revenue Fund.  The Senate wants them ear-marked in a special account and to indicate what they will be used for in the next fiscal year.

These funds will only come to the state for 27 months.  The Governor's office believes that the economy will improve to allow continued funding for these programs with the monies appropriated.  The Senate is concerned that this could be one time funding and the increased funding would not be available to continue the programs.

In a meeting in the Governor’s office on Thursday the staff suggested that two budget scenarios be developed. One would include the federal monies and a budget that would not emphasize federal stimulus dollars. GOP leaders and Governor Nixon have also been meeting on a continuous basis and have reached an agreement on how much revenue will collect. The consensus was a figure of 1% growth in fiscal year 2010.

News this week includes:

Nixon Outlines Health Spending In State Address
Gov. Jay Nixon delivered his first “State of the State” address to the Missouri General Assembly on Tuesday evening. The speech described his vision for leading the state through difficult budgetary challenges and his budget and policy priorities. The governor’s health care spending initiatives in his budget include $231 million to extend MO HealthNet coverage to 35,000 more working adults and       27,000 children. He noted that “while this is the logical first step towards expanding health coverage, it won’t be the last step. We must continue to work together to further expand coverage and further drive down costs for Missouri families.”

Aid to Local Public Health
The Governor proposed budget for 2010 does not contain an increase for state aid to local public health departments. The new DOH Director, Margaret Donnelly, was in support of an increase. However, the Governor’s office is reducing not adding to programs.

I plan to meet with Dr. Cooper and Representative Icet next week to determine how we can utilize federal stimulus funds if they come to the state.

Next week
Hearings will continue at a hectic pace. If you’d like to view the budget in full please go to: http://www.oa.mo.gov/bp/budg2010/

[top of page]