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Budget withholds crucial to calculation of higher ed cuts

Tuesday, January 24, 2012 | 5:38 p.m. CST; updated 8:35 a.m. CST, Wednesday, January 25, 2012

JEFFERSON CITY — The budget cuts to higher education announced at Gov. Jay Nixon's State of the State address last Tuesday are deeper than the numbers presented by the governor's budget director and reported by the media.

Although the 12.5 percent cut presented by the governor's budget director and used in many news reports are not completely inaccurate, the actual cuts in appropriations to public universities are 15.1 percent when compared to what the Missouri General Assembly approved last year. The cuts to Missouri's public universities are the deepest in at least two decades.

The more accurate figure caught the Senate Appropriations Chairman, Sen. Kurt Schaefer, R-Columbia, by surprise. He agreed the 15.1 percent cut was the more accurate number. Schaefer called the governor's 12.5 percent cut "not true."

The two sets of numbers result from a difference in perspective and a spending withhold Nixon placed on the colleges last year.

The Missouri Constitution allows the governor to withhold money from a budget if state revenues fall below expected levels. Nixon used this power in July to withhold $150 million from the 2012 budget, $10 million of which came from the universities.

If the withhold on the current university budgets are taken into account, then the governor's 12.5 percent figure is correct; however, if the proposed cut is compared with the legislature's 2012 appropriation, then the 15.1 percent cut is accurate. 

In theory, the governor could decide at any point this fiscal year to withhold more money from the universities or return funds to them.

Schaefer said the legislature does not "appropriate off a moving target."

The constant flux of withholds makes basing budget figures difficult for lawmakers. In fact, three percent of state agency appropriations are automatically withheld every quarter during a fiscal year according to statute, and can only be released with the governor's approval.

The governor's budget is similar to the one concerning elementary education funding. During his State of the State address, Nixon touted his education budget as a "record amount" in funding for school districts.

House Budget Chairman Ryan Silvey, R-Kansas City, called this statement "misleading" and pointed out that it was the General Assembly last year who gave a record amount to school districts before withholds from Nixon brought the figure down.

The amount of money the governor proposed for the school foundation program is actually $5 million lower than what the General Assembly approved last year. This is due to a withhold of local school district transportation funding for the current fiscal year that the governor took into account when presenting his 2013 plan.

Nixon announced the withholds from the 2012 budget as a means to reserve payments for disaster relief from last spring's floods and tornadoes. 

At the time of withholds, the state's fiscal year had not yet begun. This episode is the subject of a pending lawsuit in the Cole County Circuit Court filed by Republican Auditor Tom Schweich, who contends Nixon defied the state constitution when he withheld money prior to the start of the fiscal year.

Nixon was able to allocate money for the disaster relief and withhold from other parts of the budget because of an accounting practice that allows specific programs to spend all the money they can get. The General Assembly placed a "1E" character on the 2012 budget for disaster relief last year, allowing the State Emergency Management Agency (SEMA) to spend an unspecified amount of money if it could. Nixon's $150 million withhold gave SEMA the funds to pay for disaster relief.

The state faces a budget shortfall of $500 million caused by the use of one-time federal stimulus funds in previous years and a reduction in the federal government's matching rate of Medicaid costs.

Jordan Shapiro is a reporter for Missouri Digital News.

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