Missouri set to get $4.3 billion from stimulus package

Wednesday, February 18, 2009 | 12:58 p.m. CST; updated 6:36 p.m. CST, Thursday, February 19, 2009

COLUMBIA — Federal stimulus package funds will provide more than enough money for Gov. Jay Nixon to balance the state budget and cover his higher education proposal.

Missouri is scheduled to receive $4.3 billion from the federal stimulus plan, which is more federal money than originally anticipated. This could help fulfill the promises Nixon made in his budget proposal, including his plan to retain state appropriations for higher education. The governor's recommendations still need legislative approval.

“He was very conservative in terms of what federal stimulus money he used in his budget recommendations,” said Paul Wagner, deputy commissioner for the Missouri Department of Higher Education.

The stimulus package also includes a tax cut to nearly four million students and a $500 increase to the maximum award for Pell Grants.

Much of the money set aside to meet or stabilize the state's budget needs for education, however,  is restricted. One such item sets funding for primary and secondary education at the level appropriated for fiscal year 2008 or fiscal year 2009, whichever is greater.

States must also fully fund Missouri's K-12 public schools according to a set formula for the next two fiscal years. The remaining funds designated for education would be put toward Title I programs, such as No Child Left Behind.

“I don’t see how higher education is going to get any additional dedicated operating funding from that,” Wagner said. Additionally, he said higher education institutions could get additional funding from other parts of the stimulus package, such as grants from the National Science Foundation.

The $4.3 billion also includes $1 billion for Medicaid matching dollars. The federal government previously matched 64 percent of state Medicaid costs. The final version of the stimulus plan increases Missouri's match rate by 8 percent, instead of the anticipated 6.8 percent, according to Missouri Budget Director Linda Luebbering. Consequently, this part of Nixon's budget will increase from $809 million to almost $1 billion.

“That is the only thing that he built into his budget because it was the only item that was most certain at the time,” Luebbering said.

Officials will continue to work on allocation of stimulus package funding over the next several months, Wagner said.

“Everyone is still on a pretty steep learning curve to understand what the implications are for the state,” he said.

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