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

Thursday, October 29, 2009 | 12:01 a.m. CDT; updated 10:19 a.m. CST, Tuesday, December 8, 2009
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Gov. Jay Nixon announced $204 million in Missouri state budget cuts.

JEFFERSON CITY — Missouri's governor ordered budget cuts expected to eliminate an estimated 700 full-time and part-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. An estimated 200 full-time jobs and about 500 part-time jobs were eliminated in cuts that affect state departments.

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 this year.

"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 percent to 6 percent range.

"This isn't Washington," Nixon said, citing his constitutional duty to balance the budget. "We don't get to print money."

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, $32.45 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 who are currently being reimbursed at rates higher than federal guidelines, State Budget Director Linda Luebbering said.

No definitive decisions on what full-time jobs would be eliminated have been made yet, Luebbering said.

Both Nixon and Luebbering acknowledged that the administration is still working with all agency officials on what jobs will be eliminated.

Funding to the Higher Education Department was cut by more than $7 million with most coming from the MU Health Care's hospitals and clinics 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 fewer buses or find the funds elsewhere, said Elementary and Secondary Education Department spokesman Jim Morris.

Busing within the Columbia Public School system will remain unaffected, district chief operations officer Nick Boren said.

"We didn't really believe that $15 million would come to fruition," Boren said, adding that the department never included the funds in its budget this year.

The Mental Health Department lost more than $15 million, a fifth of which was meant to fund services for 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. Although the state would be allowed to offset budget cuts with the remaining money, Nixon, Luebbering, Crowell and Icet 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.

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