Missouri higher education institutions might not see funding cuts in the new state budget if federal money comes through to supplement the state’s budget shortfall, a joint committee of senators and representatives agreed Thursday.
The compromise budget includes a plan to restore the 10% cuts to higher education institutions that were planned due to COVID-19-related budget shortfalls. The plan would also allocate funds to the NextGen Precision Health Institute being built at MU.
But the 10% cuts and money for the precision health center will only be restored if the federal government continues to aid the states during the crisis.
Lawmakers are completing work on a $30 billion budget, trying to meet a constitutional deadline of 6 p.m. Friday. As the state’s economy has been ravaged by the COVID-19 pandemic, they have worked to cut hundreds of millions of dollars from their initial budget proposal. The new budget year begins July 1.
The House version of the budget cut about $700 million, including about $37 million from higher education. Senators decided to build in federal money that the state has not yet been promised. They restored the higher education cuts and put $10 million toward the NextGen project.
If the federal money doesn’t arrive, cuts like the 10% to higher education would occur.
“The purpose of the way this is structured is so that should we receive additional federal funding … , there could be an opportunity to restore these cuts to higher education,” Rep. Cody Smith, the House Budget Committee chairman, said.
But this federal money is in no way guaranteed.
“You know, anyone’s guess is as good as mine,” said Paul Wagner, the executive director of the Council on Public Higher Education, when asked if he thought the federal money would come through.
He said if the federal government extends the window in which it will pay a higher percentage of state Medicaid claims, it would create the Federal Budget Stabilization Fund. This is a “fairly common mechanism” used to help states in times of crisis, according to Wagner.
“It is something that would take new federal action,” Wagner said. “So if the federal government chooses to do something to continue to help states in this crisis, we think there’s a fairly good probability that it would use this enhanced Medicaid match as at least part of that package.”
Wagner also noted that Gov. Mike Parson has warned that the General Assembly’s budget is not balanced, which could lead to a veto or additional withholds.
But Wagner said if the federal money does come through, it would completely restore the 10% budget cut to higher education.
“It’s definitely a big caveat,” Wagner said. “But it is true that if this takes place, then as far as what’s budgeted now, there would not be a cut for higher education in fiscal year ’21.”
The money allocated for the Precision Health Institute exceeded Parson’s recommendation by $7 million. The House had proposed cutting money for the new medical center entirely.
“I think the fact that it’s in line to get $10 million now is a positive development,” Wagner said of the NextGen institute. “And we really hope that $10 million comes to fruition.”