JEFFERSON CITY — Facing the largest revenue decline in Missouri history, Gov. Jay Nixon cut an additional $126 million from the current budget Thursday.
Revenue collections for fiscal year 2010 have declined 12.7 percent as of March 1, according to the Office of Administration. More than $850 million in cuts have been made to the fiscal year 2010 budget since it was passed in May.
According to Budget Director Linda Luebbering, almost 60 percent of the $126 million will come from savings in Medicaid payments to the federal government because of an increase in match rates.
The money from Medicaid payments is a "savings, not a cut in spending," Luebbering said.
School transportation programs and a Public Safety Department program coordinating emergency responders took two of the largest cuts of the remaining $51.1 million.
The state reimburses school districts for expenses such as buses and fuel . Luebbering said it's up to the districts to decide how to compensate for the lost reimbursement funds.
This year, school transportation programs have been cut almost $20 million, roughly 11 percent of the original appropriation.
The Public Safety program to help facilitate emergency response was initially appropriated $87 million from general revenue, but it has now taken cuts that amount to more than $80 million.
While some federal and highway money is still available, Luebbering said the governor's office has not decided if the program should continue in the current fiscal climate.
"We don't know if it makes sense to go forward," she said.
The state's operating budget also was cut by $1 million cut, which could result in lost jobs, Luebbering said. Although the cut could be offset by lowering expenses, she speculated that it could affect state jobs.
Nixon's new cuts are based on an estimated decline of 9.6 percent in state revenue compared to 2009. The governor's office hopes this round of cuts will be the last, Luebbering said, but economic news keeps coming in worse than expected.
House Budget Chairman Allen Icet, R-St. Louis County, said the new estimate fits within economic projections of a decline between 8 percent and 11 percent. Icet, however, said he would not be surprised if another $100 million in cuts would still be required to balance the budget.
Earlier Thursday, Nixon spoke to business leaders in Springfield about the projected budget deficit in fiscal year 2011. Nixon has said $500 million will have to be cut from the budget he proposed in January.
One cost-saving plan is to consolidate the departments of Higher and Elementary and Secondary Education.
"We need to have one Department of Education that prepares students from the day they walk into pre-school to the day they walk across the stage with their college diplomas," Nixon said in a press release.
Higher Education Commissioner Robert Stein said interest is growing across the state and the nation for programs that align elementary and higher education.
Luebbering said her office had not yet estimated exactly how much money could be saved by consolidating the programs, but that it could come in the form of lower levels of administrative staff.
Jack Cardetti, a spokesman for Nixon, said the $500 million is a combination of $200 million in expected revenue decline and another $300 million the original estimate had expected in federal money.