ANALYSIS: Nixon's proposed budget cuts may be overstated

Sunday, February 1, 2009 | 5:25 p.m. CST

JEFFERSON CITY— Missouri's top two executives are talking a lot about budget cuts. But they may be overstating their case.

During his first State of the State address, Democratic Gov. Jay Nixon last week announced the elimination of 1,329 employee positions, part of what he claimed was the "largest single reduction in the state's bureaucracy in modern history."

But Nixon doesn't have the authority to get rid of all those jobs.

Shortly after Nixon spoke, Lt. Gov. Peter Kinder delivered the official Republican response and criticized Nixon for cutting tens of millions of dollars from the state's education, economic development, mental health and public safety departments.

But Kinder's numbers are questionable.

First the fact-checking on Nixon's budget-cutting assertions:

Nixon says he can save $107 million by eliminating 1,329 government positions. His budget staff says the goal is to abolish all the positions by the June 30 end of the fiscal year.

But the governor has no control over one-quarter of the positions he wants to cut.

Of the positions targeted for elimination, 339 are within the Department of Transportation and 28 in the Department of Conservation. Both agencies are constitutionally independent of the governor, overseen by commissions with dedicated funding sources.

House Speaker Ron Richard, R-Joplin, and Senate President Pro Tem Charlie Shields, R-St. Joseph, both questioned Nixon's legal authority to make cuts in those departments.

Nixon's budget director, Linda Luebbering, acknowledged Nixon cannot do so.

When it comes to the Conservation and Transportation departments, "that was basically a recommendation," Luebbering said.

The Conservation Department may nonetheless take Nixon's suggestion a step further. Assistant Director Tim Ripperger said the agency has 40 vacant positions that likely will be eliminated because of declining revenues from its earmarked sales tax.

But the Department of Transportation seems unlikely to follow through on Nixon's cuts.

Nixon's budget proposes to eliminate 173 positions from the agency's "system management," which oversees such things as pothole repairs, snow removal, mowing and motorist-assistance programs. It also proposes a net reduction of 141 positions in the highway construction section, which includes inspection and oversight for road and bridge projects.

Nixon's cuts assume the department would need fewer employees because a recent surge in bond revenues is ending, leaving the department with less money for road work.

As kindly as he could, department Director Pete Rahn said Nixon's administration is wrong.

"We always care about what the governor's opinion is," Rahn said. But "I believe that the assumption that we need fewer people because of our construction program shrinking is probably not applicable."

Those employees will be needed for an expected influx of money from a federal economic stimulus plan, Rahn said. But even if that weren't the case, the same employees who do maintenance and construction work in the summer are used to help clear snow and ice in the winter, he said.

"We struggled this week," Rahn said after snow and ice blanketed southern Missouri. "Our folks did great work, but had we had less people, I think the citizens of Missouri would not have been very happy."

Now the fact-checking on Kinder's budget assertions:

Kinder essentially claimed that Nixon has made more budget cuts than he has admitted. Nixon, for example, said the Department of Economic Development is targeted for $2.4 million in cuts as part of his plan to reduce state spending by $176.7 million below what was appropriated for this fiscal year. Kinder, however, claimed Nixon already has cut $23 million from the department.

Kinder's figures reflect the amount of money from the department that was set aside in the governor's reserve fund on the day Nixon delivered his State of the State speech. That fund typically contains about 3 percent of the state's appropriated general revenues as a safety net against agencies spending their bank accounts dry.

The amount in the fund from the Economic Development Department far exceeded that 3 percent threshold. And the total amount in the governor's reserve fund was nearly $249 million — several times more than is typical, said Kinder Chief of Staff Rich AuBuchon, a former deputy administration commissioner under Republican Gov. Matt Blunt.

When dollars are placed in the reserve fund, "you can call it what you want, but the net result is the agency can't spend the money, and if that's the case, that's a withholding," AuBuchon said.

Luebbering denied that placing money in the reserve fund amounted to a budget cut.

The reserve fund contains a combination of money from the standard 3 percent withholding, plus money temporarily moved there for cash-flow purposes and money from areas the Nixon administration was thinking about cutting, Luebbering said. The amount in the fund may change daily, she added.

The figure cited by Kinder "has a whole bunch of stuff mixed together and is very meaningless," Luebbering said.

So the bottom line appears to be this: Kinder may have attributed more budget cuts to Nixon than the governor actually plans to make. But Nixon may have overstated the amount of cuts he actually can make.


EDITOR'S NOTE — David A. Lieb has covered state government and politics for The Associated Press since 1995.



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