Missouri Gov. Nixon Outlines Measures to Plug Gap

CHICAGO — Missouri Gov. Jay ­Nixon last week announced $126 million of cuts to help fill a new hole in the state’s fiscal 2010 budget. He also proposed a partial government overhaul that would consolidate some departments, sell off state assets, and privatize services to save money in future years.

Revenue is currently down in the triple-A rated state by $700 million, or about 12.7 % compared to last year, state finance officials said. The latest estimates mean about $500 million must be cut from Nixon’s proposed fiscal 2011 budget, officials said. 

The new round of spending cuts — that would impact health and human services, state aid for public school transportation, and Amtrak subsidies — bring to $850 million the total amount of cuts enacted in the 2010 budget that runs through

June 30.

In outlining his proposed government changes, Nixon said the measures could help the state balance the next budget, though he did not put a price tag on the savings.

His proposals include consolidating the Department of Elementary and Secondary Education with the Department of Higher Education; merging the highway patrol and water patrol units; and privatizing some services like collection of child support.

Nixon wants to sell some vehicles in the state fleet and some non-essential office buildings, eliminate some state holidays — such as former President Harry S. Truman’s birthday — for state workers, and eliminate some jobs.

“We need to find more savings by consolidating functions … Wherever we can reduce the bureaucracy and streamline services for the taxpayers, we must do it,” he said in a speech to business leaders in which he outlined his proposals.

Nixon earlier this year proposed a $23.9 billion all-funds fiscal 2011 budget that had banked on an economic rebound, federal funds, and cutting spending and jobs to keep the state in the black.

The budget anticipates tax revenue of $7.2 billion, up from the nearly $7 billion the state expects to collect in the current fiscal year.

Missouri’s northern neighbor, Iowa, received better news last week. Its Revenue Estimating Conference released revised estimates that showed some improvement, though slight.

The state will have nearly $1 million more in revenue in the current fiscal year, which runs through June 30, and $34 million more in the next fiscal year.

“While this $33.1 million increase in next year’s budget is small, it shows that our efforts to grow our economy are working. The REC’s report also confirmed FY10 budget remains balanced,” said Gov. Chet Culver.

The Democratic governor also last week signed legislation that implements a series of government reform measures that he said could save about $125 million. Additional measures need support to keep the fiscal 2011 balanced, as the savings were included in the proposed fiscal 2011 plan.

The reorganization savings, along with passage of an early-retirement package for state employees and other cuts undertaken by Culver, have trimmed a total of $270 million in government spending.

“It’s a huge step forward, but obviously we’ll continue to make efficiency a top priority, whether it’s the rest of this session or into the future,” he said in a statement.

Culver earlier this year proposed a $5.32 billion fiscal 2011 budget that keeps the state in the black through the use of $254 million in fiscal reserves, $52 million from the elimination or reduction in some tax credits, and the reorganization savings.

Iowa does not issue stand-alone GOs, but it carries a Aa1 issuer rating from Moody’s Investors Service, an implied GO rating of AA-plus from Fitch Ratings, and a AAA from Standard & Poor’s.

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