JEFFERSON CITY — Higher education funding would remain flat under Gov. Mike Parson’s proposed 2021 budget, following a year in which the administration has focused on post-secondary education programs.
But requested funding for a high-profile project on the University of Missouri campus would see a $7 million cut from this year.
The governor’s $31 billion budget proposal is the first step in creating the 2021 state budget. Lawmakers will use it as a jumping off point in creating the final version by May.
Under Parson’s proposal, MoExcels — a project created last year to encourage workforce education and training programs in colleges and universities — would receive $19.6 million. That funding goes to higher education institutions.
Missouri One Start, also created last year, would receive $14.9 million to continue workforce training initiatives for Missouri businesses. The A+ Scholarship Program — which provides funding to graduates of A+ designated high schools who attend participating public community colleges, trade schools and certain private trade schools, according to its website — would see a $4.8 million increase. Overall, the budget recommends an almost $10 million increase to higher education grants and scholarships.
Zora Mulligan, Missouri commissioner of higher education, said proposed increased funding for the Fast Track Workforce Incentive Grant, which targets adults pursuing education in high-demand occupations, offers a parallel approach to the A+ Scholarship Program that targets recent high school graduates.
“Our basic proposition is pretty simple,” Mulligan said. “It’s the idea that in order to drive economic development and improve lives, we need to get more people in the workforce and we need to help them be more productive. The best way to have more productive citizens is to have them have some kind of education or training, so the financial aid programs are important strategies we can use to drive those categories.”
If approved by the legislature, the UM System will receive around $416 million for core operations. UM President Mun Choi had asked for that level of funding plus inflation, but that was not included.
The UM System’s NextGen Precision Health Institute is slated to receive $3 million, which is $7 million less than what Choi requested when he met with the House budget committee. The project received $10 million this year, the same amount Choi wants for next year.
The Missourian asked UM officials about the cut, but they did not address that in the written response provided.
“I’m extremely grateful for Gov. Mike Parson‘s support of public higher education and our four universities within the UM System,” Choi said. “The governor has shown through his words and actions that he is a fierce proponent of higher education and recognizes that Missouri’s future depends on having an educated, prepared workforce.”
The budget proposal also recommends fully funding the state’s elementary and secondary education formula. The governor also recommends a $10 million increase to fund additional school transportation costs.
Other transportation needs also were addressed, with $50 million to continue a program in which local government and the state share the costs of road and bridge projects.
New kind of reserve fund
Wednesday’s proposal sets aside $100 million for any unprecedented needs, similar to last year’s proposal, where he recommended setting aside $116 million.
However, Parson also recommended the creation of a cash-operating expense fund, to be used alongside the current reserve fund. The $100 million will be placed in that fund. Budget Director Dan Haug said the fund will give lawmakers another tool when it comes to dealing with emergencies.
“It’s a responsible way to set aside money for a downturn without having severe cuts,” Haug said. “It’s important to set this up while we’re in the good times, because sooner or later the bad times are gonna come.”
If the Wayfair internet sales tax passes, revenue from it would go into the cash-operating expense fund, under the governor’s proposal. Once the fund reaches 2.5% of the previous year’s collection, the excess money would go toward one-time expenses. The Wayfair tax would allow the state to charge sales tax on purchases from out-of-state businesses such as online retailers.
But passing Wayfair is not guaranteed.
Because Republicans control the Senate, the biggest threats to Parson’s initiatives are sometimes the most conservative members of the party, rather than the Democrats.
Sen. Bob Onder is a member of the conservative caucus, which consists of six of the most conservative Republicans in the Senate. The caucus opposes all tax increases, and Onder said he would only support the Wayfair tax if it meant taxes were cut in other areas.
The governor’s proposed budget is based on a projected revenue increase of 1.9%, and Onder said that he and some of his colleagues involved in the budget process are concerned that the governor’s revenue estimate isn’t realistic.
“I think it’s OK for the governor to say that he left $100 million on the bottom line, but if the revenue projections are overly optimistic, that doesn’t mean anything,” Onder said.
Pay raises, Medicaid
If approved, the budget would also include a 2% pay increase for the majority of state employees in January 2021, following a 3% pay increase in 2020. Parson also proposed $5.1 million for funding performance incentives, which would go toward motivating the top 10% of state employees across 15 departments.
Despite a drop in Medicaid enrollment, including 100,000 children, Parson’s budget proposes nearly $600 million in additional Medicaid funding. Todd Richardson, director of MO HealthNet, said costs continue to rise irrespective of enrollment numbers because of inefficiencies in the system such as outdated payment methodology.
The reason for the drop in enrollment has been heavily contested, with Republicans citing an improved economy and Democrats pointing toward children who they say are still eligible being removed from the system.
In other health care funding, the proposed budget includes increases for treating developmental disabilities and mental health.
Haug said the budget includes about $13.6 million from the first year of medical marijuana sales, most of which will go towards administration of the program.
Madison McVan contributed to this report.
Supervising editor is Mark Horvit.