CHICAGO - Missouri Gov. Jay Nixon unveiled a fiscal 2016 budget that would begin drawing on existing bonding authority to fund more than $300 million in projects at state facilities and public higher education institutions.
The Democratic governor faces even larger Republican majorities in the Legislature this year, and used his State of the State address Wednesday evening to call for bipartisan cooperation, highlighting past accomplishments that include conservative budgeting and past pension reforms. Past clashes included the Legislature's successful override of a Nixon veto of tax cuts.
"We're moving Missouri forward on a foundation of fiscal discipline and solid economic growth," he said. "We balance budgets. We keep taxes low. And we continue to downsize state government."
Nixon proposed tapping $161 million from bonding authority granted last year by lawmakers to fund higher education projects and $192 million to fund state building projects.
"Strict fiscal discipline helped protect our AAA credit rating, giving us the opportunity to make essential, long-overdue investments in the future," Nixon said. "Last year, the legislature took the first step by passing additional bonding capacity. That means this year, we can move forward with a strategic bond issuance to fund improvements to our college campuses, state buildings, state parks and veterans' homes."
The fiscal 2016 budget plan includes an $8.7 billion general fund, up 3.6% from fiscal 2015 based on a revenue forecast agreed to by the Nixon administration and legislative leaders. Spending could be impacted by how the books for the current fiscal year look come June 30 as revenue projections have been revised downward to 4.6%.
Nixon's budget includes a $150 million increase in kindergarten through 12th grade aid although the funds rely in part on the legislature agreeing to his proposed reforms and expansion of Medicaid and a tax amnesty. The budget does not include raises for state employees and cuts about 200 positions.
Nixon called for municipal court reforms. Heavy reliance on court fines by some municipalities to support their budgets has come under scrutiny following the shooting to death last summer of unarmed black teen Michael Brown by a white police officer in Ferguson. The shooting and later a grand jury decision not to charge the officer led to national protests. Lawmakers are expected to consider reducing the amount of a local government's budget that can rely on court fines.
Nixon has also called for economic reforms and will receive recommendations from a special commission in September. "The legacy of Ferguson will be determined by what we do next to foster healing and hope and the changes we make to strengthen all of our communities," Nixon said in his speech.
Nixon's renewed his pleas to expand Medicaid under federal healthcare reform. Past calls have fallen flat with Republican lawmakers. In Nixon's new push he said at least 300,000 uninsured would be eligible and result in state savings and new revenue in the next fiscal year of $117 million. Republican leaders said they remain opposed.
"States that have strengthened and improved Medicaid have had three times the growth in health care jobs as states that haven't," Nixon said.
Transportation funding also will take center stage during the legislative session. Transportation officials recently warned of the dire need for a new funding stream. Nixon offered up several options but did not endorse any specific one.
"One option is a toll road on Interstate 70. The Highway Commission's recent report showed that this approach could make I-70 better and safer and free up tens of millions of dollars for other roads around the state," Nixon said. "Trucks and out-of-state vehicles that do the most damage to I-70 would have to pay their fair share. That deserves serious consideration."
Nixon also suggested a gasoline tax hike.
"With gas prices as low as they are now, this is worth a very close look," he said. "If we want to leave Missouri roads better than we found them, the only thing we can't do is sit still. This is a major, long-term challenge."
Transportation officials have warned that the $325 million in available annual funding will fall short of the $485 million needed just to keep roads and bridges in their current condition. A shortage of funding also will hurt the state's ability to provide matching funds needed to capture federal dollars. A one cent sale tax hike made it to the ballot last summer but voters rejected it.
Nixon received a report in late December that recommended the state put tolls on Interstate 70 to fund reconstruction and widening of the highway between St. Louis and Kansas City.
Rating agencies last year affirmed Missouri's triple-A ratings but warned they are watching to see how the state deals with income tax cuts and what future action the legislature might take to challenge the governor's budget withholding powers, which were weakened in a voter approved referendum in November.
The state closed out fiscal 2014 June 30 with revenue collections of about $8 billion, down 1% from the previous year, and slightly below projections, but Standard & Poor's noted that reserves remain fully funded at $557 million. The state also held a general fund reserve of $222 million.
Nixon did not address public funding for a new National Football League stadium for the St. Louis Rams, whose owner has unveiled plans in southern California for a development that would include a new stadium.