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Nixon proposes increased funding for education, new bond issue in State of State address

Monday, January 28, 2013 | 11:08 p.m. CST; updated 8:48 a.m. CST, Tuesday, January 29, 2013
Missouri Gov. Jay Nixon presents his State of the State address on Monday in the Missouri House of Representatives at the State Capitol in Jefferson City.

JEFFERSON CITY — Speaking in the House Chamber before the House and Senate at the Missouri Capitol on Monday, Gov. Jay Nixon outlined his budgetary goals for fiscal year 2014. 

The proposed budget included an increase of $150 million to education and more than $1 billion to health care, most of it from federal funds. Nixon also proposed a bond issue to pay for statewide projects and changes to tax-credit programs. 

House Speaker Tim Jones, R-Eureka, delivered the response for the Republican Party.

Education

Among his suggested $150 million increase for education, Nixon proposed a $17 million increase in early childhood education, $100 million in new funding for K-12 classrooms and an increase of $34 million in higher education funding.

The proposed increase for K-12 education would go to fund the K-12 foundation formula and to support programs such as Access and Bright Flight scholarships, the A-plus Scholarships program, special education for high cost students and opportunities for low-income school districts.

The governor's suggested $34 million increase in funding for Missouri colleges and universities would be distributed according to each school's performance against certain measures, which would mean an average funding increase of about 4 percent for each school.

Medicaid expansion

Nixon included Medicaid expansion in his budget proposal, saying it is the right thing to do not only from the human standpoint – the budget office predicts another 259,000 low-income working adults would be insured in 2014 – but also from a business standpoint. 

"Friends, let's put the politics of health care aside," Nixon said to chortles in the chamber, "and look at this as a business decision for the state of Missouri."

The governor argued that Missouri would forfeit federal assistance if it fails to expand Medicaid and that its tax dollars instead would fund expansions in other states. Expansion, he said, would bring $5.7 billion to the state over three years.

He cited an MU study that found Medicaid expansion in Missouri would generate an additional 24,000 health care jobs in 2014 alone. About 300,000 more people would be covered by the insurance plan.

"Strengthening Medicaid will strengthen our economy," Nixon said. "Without question, it’s the smart thing to do."

Nixon's remarks about Medicaid stirred raucous approval from his Democratic colleagues but drew silence from Republican legislators — until Nixon pointed out that some members of the legislature have criticized the federal government for not living up to its commitments. 

"Let me address that directly," he said to laughter from the left side of the chamber. If the federal government fails to meet its commitment to Medicaid, Nixon said, he would roll back any expansion.

If the legislature agrees to expand Medicaid, Missouri will receive about $8.2 billion over the next seven years. To get that money, the legislature must agree to raise eligibility limits to cover those earning income up to 138 percent of the federal poverty level. It would cost the state $333 million over the next seven years to fund the provision.

Nixon's proposed fiscal 2014 budget includes about $908 million in federal dollars for Medicaid expansion.

In the Republican Party's response, House Speaker Jones said he was disappointed that the governor didn't address what he considered to be the real crisis in the Missouri health care industry: the lack of medical malpractice award limits.

Jones has stated before that reinstating limits will be one of his priorities this session. 

Bond issue

The governor called for a new bond issue, citing low interest rates and Missouri's AAA bond rating as reasons why now is a good time to do so.

The bond issue Nixon outlined is similar, though not identical, to the one Sen. Kurt Schaefer, R-Columbia, and Rep. Chris Kelly, D-Columbia, have been working to get passed in previous legislative sessions.

The governor's version would fund projects in K-12 classrooms, college research labs, mental health hospitals, state parks and state buildings. Nixon did not mention using the bond issue for higher education buildings, which was a major portion of the bond issue Kelly and Schaefer have been trying to pass. 

Nixon said the money also could be used to establish a fund that schools could borrow money from at low interest rates. Once loans are repaid, money would be available for other schools.

The bond issue also could pay to rebuild Fulton State Mental Hospital.

"We have a moral responsibility to these patients and their caregivers to provide the best possible environment: one that is safe, secure and conducive to healing," he said.

Funding for Missouri's highways would not be part of the bond issue proposed by Nixon, Linda Luebbering, budget director in the Office of Administration, said. 

Jones said he held common ground with the governor on the bond issue, though he was disappointed that the State of the State address did not mention transportation funding.

Tax-credit reform

Nixon outlined no specific changes to tax-credit programs he would like to see, though he did say that a 2010 report would serve as a benchmark for reforms.

Money saved by reducing tax credits, which Nixon said took one-twelfth of the general revenue budget in 2012, could be used to repay the bond issue he proposed. Tax credits cost the state $629 million in fiscal 2012, Nixon said.

The governor has been working, without success, to scale back and eliminate some tax-credit programs since 2010. Lawmakers from both sides of the aisle have joined Nixon's effort, but some caution that cutting too much from programs that have benefited Missouri would obstruct economic development.

Tax credits give businesses and residents breaks for certain kinds of projects. Historic preservation and low-income housing are the state's most expensive credit programs.

Some legislators have promised to try to scale back tax credits this session, and a handful of bills to do so have been prefiled in the Senate.

Bills prefiled by Sen. John Lamping, R-St.Louis, and Sen. Brad Lager, R-Savannah, would cap historic preservation and low-income housing credits. Lager's bill would eliminate some credits entirely.

Nixon also repeated his call for campaign finance reform, saying that is the single most important ethics move the legislature can make. If the General Assembly fails to act, he said, he'll "do everything in my power" to put the issue on a ballot for voters to decide.

Supervising editor is Scott Swafford.


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