Senate committee questions uncertain budget funds

Monday, January 25, 2010 | 10:46 p.m. CST; updated 10:22 a.m. CST, Tuesday, January 26, 2010
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The governor's recommendations for the 2011 fiscal budget include eliminating and reorganizing positions in several departments.

Sen. Kurt Schaefer is a Republican. A previous version of this story misstated his party affiliation.

JEFFERSON CITY — Members of the Senate Appropriations Committee expressed concern Monday that $300 million of Gov. Jay Nixon's budget proposal depends on uncertain federal funds.

"You are banking on speculation," Sen. Kurt Schaefer, R-Columbia, told State Budget Director Linda Luebbering. "But we have no guarantee the state of Missouri is going to get that money."

The projected revenue would come from a six-month extension of an enhanced match rate for Medicaid funding that pays an additional 10 cents on the dollar, which is in a current jobs package, and other health care legislation. Both are still under debate in Congress, Luebbering said.

The jobs package also includes additional stabilization funds for education, but Luebbering said Missouri would likely not qualify for this money because it required education funding from last session's budget to exceed 2006 levels, the previous qualifying threshold for stabilization funds.

Luebbering said the federal legislation in question could be decided before the Appropriations Committee finalized its budget numbers for next year.

If it isn't decided, Committee Chairman Rob Mayer, R-Dexter, said, it was too early to say whether he would vote for a budget that included $300 million in speculative funds.

He expressed concern about the uncertain nature of these funds and more than $50 million in anticipated revenue from a more aggressive effort by the Department of Revenue to collect back taxes and attempts to retrieve excess money in more than 20 state funds.

"Past legislatures have had a lot of contention in collecting that," Mayer said.

If the anticipated $300 million does not materialize, Luebbering said, Nixon's office is prepared for additional budget withholdings, but she didn't specify where these withholdings would be.

Some committee members also voiced concerns about Nixon's plans to avoid identifying in the budget how federal stabilization funds will be used.

The budget recommendation transfers about $1 billion into the state's total $8.4 billion General Revenue Fund without indicating the specific programs for which the federal money would be used.

Schaefer said stabilization funds are supposed to be accounted for separately from General Revenue.

"It's not an accurate accounting of what the money is and where it comes from," he said.

Because the money will expire in a year, Schaefer said the money would be better spent on one-time expenses like capital projects, which would also create jobs.

But Sen. Joan Bray, D-St. Louis County, said she approves of Nixon's use of stabilization funds to balance the budget.

"I would have real problems building buildings while we have people going without mental health care," she said.

Luebbering told the committee that the budget for 2012 — when the stabilization funds expire — will continue to be challenging.

A continued economic turnaround, the multiplying effects of current cuts and increased tax revenue will make up some of the gap in funding from the expiration of stabilization funds, she said, but additional cuts will be needed two years from now.

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