JEFFERSON CITY — Missouri lawmakers passed a $23 billion operating budget Thursday that dodges deep cutbacks by relying on federal economic stimulus money to help fund schools, colleges and various other state services.
Propped up with $785 million from the stimulus package, Missouri's operating budget would grow by 3 percent despite an economic recession that has caused a decline in state tax revenues.
"Our income has gone down by more than 4 percent. We are going to vote to spend 3 percent more than we did last year. How did we do this magic? By borrowing money," said Sen. Matt Bartle, R-Lee's Summit, referring to financing of the federal stimulus package.
Supporters of Missouri's budget hope the economy will pick up within a couple of years, spurring a rebound in state tax revenues that will more than make up for the expiration of the federal stimulus dollars by the state's 2012 fiscal year.
"The economy is in the tank," said Rep. Chris Kelly, D-Columbia, the ranking minority member on the House Budget Committee. "When the economy gets smoking again, more general revenue will come in."
If that does not happen, the state could be forced in the future to make the cuts it largely avoided this year.
The budget bills now head to Gov. Jay Nixon, who can veto particular expenditures but cannot add to the lawmakers' spending list.
Absent from the budget is Nixon's proposed Medicaid expansion for low-income adults, although lawmakers left room for an alternative health care plan to be funded if they can agree on the details before the May 15 end of the session.
Missouri expects to receive about $4.5 billion over two years from the federal stimulus package, more than half of which is federally earmarked for specific purposes such as roads, homelessness and energy efficiency projects.
Lawmakers have greater flexibility over about $2 billion of the state's total stimulus share, a portion known as "budget stabilization" dollars. In addition to plugging $785 million of that money into the operating budget, lawmakers are considering spending several hundred million dollars of it on special projects around the state. The rest would be saved for later use.
The great majority of federal "stabilization" money included in Missouri's 2010 budget would go to education. Of $3 billion in basic aid to K-12 schools, nearly $517 million comes from the stimulus package, freeing up state money to be spent elsewhere.
An additional $148 million from the stimulus package would go to public colleges and universities. Included in that is a multi-million-dollar pool of money equal in size to the amount sought by colleges and universities to expand classroom slots for health care students.
But the budget does not direct the money to expanded health care courses, which would be an ongoing expense. Instead, it says higher education institutions can use it "for any one-time purpose."
The budget also uses the federal money for a variety of smaller-dollar projects. Among them:
— $128,000 to repair the state airplane used by Gov. Jay Nixon and others.
— $787,600 to help pay the college tuition of National Guard members, fund military honor funerals and provide special coins to the families of deceased veterans.
— $500,000 to print the biennial edition of the Official Manual of the state of Missouri.
— $2,725 to cover the increased cost of paper for the Missouri State Highway Patrol.
Although some Republicans initially balked at the idea, the budget would use the federal "stabilization" money for a variety of ongoing programs, including the state Division of Tourism and subsidies for Amtrak's twice daily passenger train service between St. Louis and Kansas City.
The federal money even would be used to offset two state tax credits — one of which helps seniors and the disabled avoid sharp property tax increases, the other of which aids companies that repair old railroad cars in Missouri.
Despite the influx of federal money, some programs historically dependent on state dollars would receive cuts under the budget.
Among those are the state Scholars and Fine Arts academies, a pair of three-week summer programs for about 530 gifted high school students. Their state budget of $718,000 would be slashed to $259,000 next year.
Jim Morris, a spokesman for the Department of Elementary and Secondary Education, said the agency is considering several options — serving fewer students, shortening the length of the academies, combining them and seeking additional money from donors or the universities that host the academies.
The budget reduces the total number of authorized, full-time state employee positions from 59,873 this year to 58,648 next year. Some of those slots are vacant, and Nixon already has laid off employees in other slots. The budget provides no pay raise for state employees.
Still unclear is whether the state will expand subsidized health coverage to some Missourians. The budget includes $147 million for a new health care plan, but it is contingent upon lawmakers passing a separate bill creating the program before the end of the legislative session. So far, there is no agreement on the details of that plan.