In State of State speech, Nixon urges more spending

Republicans lawmakers skeptical that federal funds will cover what state money can't

01/29/2013 9:30 AM

05/16/2014 8:56 PM

For his first four State of the State speeches, Missouri Gov. Jay Nixon called on lawmakers to slash government spending, including $500 million in cuts last year.

Times have changed.

In a joint session of the General Assembly, Nixon on Monday called on lawmakers to use $900 million in federal funds to add 300,000 Missourians to the public health insurance program for the poor. He also wants to increase funding for K-12 public schools by $108 million, higher education by $34 million and more than double funding for the state’s preschool program.

Besides the federal funding, Nixon said an improving economy and past fiscal restraint allow Missouri to invest more in its key priorities.

Republican lawmakers, who hold veto-proof supermajorities in the House and Senate, did not immediately embrace the Democratic governor’s proposals. But Nixon called on lawmakers to set aside political differences for the betterment of all Missourians.

“We now have a unique opportunity to build a better future for our children,” Nixon said. “We must seize it.”

Nixon’s budget proposal relies heavily on the expansion of Medicaid envisioned by the federal health care law. Recipients of federal Medicaid money — most prominently the health care industry — would pay an additional $15.5 million in Missouri income and sales taxes, Nixon said, and the state would save $31 million when the federal government picks up much of the tab for mental health services and programs for disabled residents and pregnant women.

It also assumes that millions of dollars would be saved or raised if lawmakers pass certain pieces of legislation — such as a bill that would make it easier to collect sales taxes on online purchases.

All told, the governor’s budget relies on roughly $164 million in funds that would require legislative action.

In the past, Republican legislative leaders have been cool to many of the proposals, including the expansion of Medicaid, which calls for the federal government to pay 100 percent of the additional cost initially with the state picking up 5 percent beginning in 2017 and 10 percent by 2020.

“We continue to have misgivings about the federal government’s ability to meet the additional spending, since they haven’t passed a budget in four years and borrow 40 cents for every dollar,” said Senate President Pro Tem Tom Dempsey, a St. Charles Republican. “None of that has changed.”

Nixon said that persuading Republicans to go along with the expansion is part of an education process he already has begun. The U.S. Supreme Court upheld the law, and despite misgivings, it is not within a state’s power to rewrite federal law, he said.

Nixon pointed to a University of Missouri study that found expanding Medicaid would create more than 24,000 jobs in the state in its first year.

“Will we bring the tax dollars that Missourians send to Washington back home to strengthen our Medicaid system here in Missouri?” he asked. “Or will we let the tax dollars that Missourians send to Washington be spent in other states instead? Other states would get the benefits, and we’d get the bill.”

To help soothe GOP concerns, Nixon said he would support a provision to roll back the expansion if the federal government doesn’t live up to its promises.

House Speaker Tim Jones, a Eureka Republican, seemed to dismiss any possibility of expanding Medicaid, saying that Missouri has a governor who “believes bigger government is the answer.”

“We will not follow the lead of out-of-touch bureaucrats whose reckless spending has pushed our nation to the brink of financial disaster,” he said.

Nixon’s plan to fund higher education comes with strings attached, basing all increases on a new performance funding model.

“We expect better test scores, better graduation rates, more college degrees and more Missourians ready to compete for the best jobs in a global economy,” he said.

The additional $100 million for K-12 schools would put funding at record levels but would still fall $620 million short of what is called for under Missouri’s school funding formula.

Nixon is also asking lawmakers to extend Missouri’s school year six days, pointing out that the state has the fourth-shortest in the nation.

“Adding six more days to the next school year will give teachers more time to work with their students, and give kids more time to learn.”

The governor also expressed support for borrowing money to pay for capital improvements at public schools and universities, state parks and the Fulton State Hospital. Nixon’s plan would pay for the bonds by cutting state spending on tax credits, including those for low-income housing and redevelopment of historic property.

His proposal did not, however, mention any transportation funding.

Senate Appropriations Chairman Kurt Schaefer, a Columbia Republican, said that for the most part he liked what he heard from the governor.

“I was happy to see a push for higher K-12, higher education and mental health funding,” he said. “But obviously, the devil is in the details, and we have to see where that money comes from.”

Apart from the budget, Nixon made his strongest call yet for lawmakers to pass comprehensive campaign finance reform. Missouri is the only state that allows unlimited campaign contributions and unlimited lobbyist gifts.

“This year, if the legislature does not send a campaign contribution limit bill to my desk, I will do everything in my power to get it on the ballot and make sure it passes,” Nixon said.

“The people of Missouri have voiced their opinion on this matter already at the ballot box and their support for contribution limits was overwhelming. We all know it would pass once again.”

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