Gov. Nixon announces $204 million in new budget cuts
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Gov. Nixon announces $204 million in new budget cuts

Date: October 28, 2009
By: Jeremy Essig
State Capitol Bureau

JEFFERSON CITY - Missouri's governor announced Monday budget cuts expected to eliminate about 200 full-time jobs -- and the top House budget leader said he expects more to come.

Gov. Jay Nixon, a Democrat, announced $204 million in spending cuts in Missouri's budget Wednesday. Almost 700 full- and part-time jobs were eliminated in cuts that affected departments across the board.

House Budget Chair Allen Icet, R-St. Louis County, and Sen. Jason Crowell, R-Cape Girardeau, said they expect Nixon will have to cut even more than the $634 million in withholdings and vetoes he has already made.

"The governor is hedging a bit," Icet said. Nixon will "have to come back and make further reductions."

Nixon, while not specifically ruling out additional cuts, said he thinks state revenue will begin to increase. Currently, Missouri's revenue collections are down 10 percent compared to last year. Nixon said he hopes the decline will raise to the 5 to 6 percent range.

"This isn't Washington; we don't get to print money," Nixon said, citing his constitutional duty to balance the budget. Describing the cuts as "early and decisive action," Nixon said they will allow the state to keep funding level for education, health care and jobs.

The largest cut, $32.5 million, would come from containing Medicaid costs. While specifics of the plan still need to be ironed out, the majority of the money would come from reducing payments to certain providers and encouraging pharmacists to use generic drugs. Provider cuts would affect those providers who are currently being reimbursed at rates higher than federal guidelines, State Budget Director Linda Luebbering said.

"I should also note that all of the issues around Medicaid here would have been much easier had the legislature adopted what was a very, very solid proposal last year to not use one penny of state dollars," Nixon said. "If we had that $150 million in the state till, all of this would have been much easier."

No definitive decisions on what full-time jobs would be eliminated have been made yet, Luebbering said.  Both the governor and Luebbering acknowledged that the administration they still are working with agency officals on the details of the cuts.

Funding to the Higher Education Department was cut by more than $7 million, the plurality of which came from University of Missouri hospital and clinic general operating funds.

While Rep. Chris Kelly, D-Columbia, said programs "close to his heart" will be affected, he added that the governor had no choice. "The governor is constitutionally required to balance the budget," Kelly said. "It's his No. 1 duty."

Kelly said he doesn't anticipate Nixon will have to make additional cuts to the budget and described making the cuts as "economically intelligent."

Making the cuts early will allow the affected programs and departments to make budget decisions and spread out the remaining money over the course of the year, he added.

Icet, however, disagreed. The longer Nixon waits to make more cuts, the deeper they will have to be, he said.

Bus funding for K-12 students was cut by almost $16 million. Individual school districts will have to decide whether to extend routes, run less busses or find the funds elsewhere, said Elementary and Secondary Education Department spokesman Jim Morris.

The Mental Health Department lost more than $15 million, a fifth of which was meant to fund services to community mental health centers. Department spokesman Bob Bax said while centers would still serve the needs of patients in an emergency situation, patients hoping to apply for certain outpatient services would be placed on a waiting list.

Both Democrat Kelly and Republican Crowell say this year's budget is a harbinger of things to come.

Next year's budget will have to be $500 million less than the current one, Kelly said.

Crowell said this year is "easy" compared to 2012 when federal stabilization funds run out.

Missouri is holding back $900 million in stabilization funds to apply to next year's budget. While the state would be allowed to offset budget cuts with the remaining money, Nixon, Luebbering, Crowell and Icet all agreed it made fiscal sense to save the money until next year.

"States that overspend on the front end will see a drop off at the end," Nixon said.