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Nixon restricts further $51 million in spending

Cuts exceed total of over $200 million for the year

JEFFERSON CITY, Mo. – Gov. Jay Nixon announced Wednesday that he would withhold another $51 million in cash for the current fiscal year, despite already cutting $115 million in July and $45 million in September. The governor stated that while revenues from personal income and sales tax revenue have climbed in the last quarter (usually signs of good employment levels and active consumer spending, respectively), corporate tax receipts have deteriorated 27 percent so far this year.

“We have continued to see signs our economy is strong… but with the corporate drag, we’re here today,” Nixon said.

The restrictions largely impact Medicaid spending, which will receive cuts to the tune of roughly $42.2 million. The governor said those cuts have arisen out of savings from increased efficiency within the program over the course of his administration. The other $8.8 million will be taken from excess bonding authority.

Along with those restrictions, Nixon announced that some money would be released as well, including nearly $2 million to renovate Glass Hall at Missouri State University – a nearly completed project, $1 million for K-12 transportation, and $500,000 for the Missouri State Highway patrol to replace lost federal funding.

Taking all of the governor’s withholds and releases into account, Nixon has withheld a total of $201 million for the year.

Handing off the baton

Before the dust had cleared after the election, everyone involved in the budget at some level knew that additional withholds would occur. The only questions were when and how much.

“If Gov. Nixon doesn’t make any more restrictions before he leaves office, it’s going to leave Gov. [Eric] Greitens with that responsibility when he takes office,” incoming House Budget Chair Scott Fitzpatrick told the Missouri Times last month.

However, Nixon noted that he believed he would be handing off a much better situation to his successor than when he inherited the responsibilities of the office at the height of the Great Recession. He restricted $743 million when he came into office in 2009.

Fitzpatrick
Fitzpatrick

“In comparison to those dark days, I will be leaving the next governor with a balanced budget, a growing economy, and making record investments in education and mental health,” Nixon said, adding later that it would be up to Greitens to decide whether or not more funds should be cut when he assumes office. Fitzpatrick estimates the total shortfall somewhere in the realm of $200 million, which had already factored in Nixon’s previous withholds. That fact means Nixon’s $51 million restriction is still far less than what Fitzpatrick says needs to happen.

“I still don’t think he did enough. I think there are still significant additional restrictions that need to be made even after today,” Fitzpatrick said Wednesday. “I thought a reasonable restriction would have been $200 million more.”

Fitzpatrick also expressed his doubts about how the restrictions to Medicaid would work considering the Department of Health and Social Services has already asked for supplemental appropriations.

“If the restrictions are in the same line that the departments are simultaneously saying they don’t have enough appropriation for to fund them as it stands, then I don’t know how that’s going to work,” he said. “It seems like a short-term strategy.”

However, Nixon placed the onus on the Legislature for his need to continue making withholds since it is his job to balance the budget, while the General Assembly should provide spending authority. He implied that the need for such withholds occurred because of increased spending by the Legislature and reduced revenues via the body’s “special interest tax breaks.”

“I have restricted more than $2.2 billion passed by the General Assembly that restriction power has been important and necessary,” Nixon said. “As far as guesses or political statements by members of the legislature about what me or the next governor should do, those are just that. They come from a base of having missed it by at least $2.2 billion, so if I don’t show great deference to the overspending legislature’s view as to what is the proper way to fiscally manage a state then so be it.”