CHICAGO - Missouri Gov. Jay Nixon proposed a $27.7 billion budget for fiscal 2015 that would bolster education spending by $500 million and authorize $200 million in appropriation supported borrowing for a new mental health facility.
Nixon's budget - which includes a $9 billion general fund -- anticipates that revenues will increase 5.2% from the current fiscal year. The state remains on course to close out the current fiscal year on June 30 with a $146 million ending balance.
"Continued employment increases and spending growth will help boost general revenue collections in Fiscal Year 2015," Nixon's
Nixon - a Democrat facing a GOP-dominated legislature -- laid the groundwork for new education spending in his state of the state address Tuesday underscoring how the state held the line on taxes, cut spending, and maintained its triple-A ratings during the recession.
"Tonight, as I have every year, I am proposing a balanced budget that holds the line on taxes - and continues to downsize government, cutting 81 more positions from state payrolls. By the end of this fiscal year, we will have reduced the state workforce by 4,600 full-time employees," he said.
"This is the test - and this is the year - to get serious about fully funding our schools. Our local schools will put these dollars to work in a big way for our kids and communities," Nixon said.
Elementary and secondary public education spending would see a $278 million increase with additional spending on public higher education and other education programs receiving an overall hike of $500 million.
Republican legislative leaders challenged the governor's growth projections. They have projected growth at 4.2%, or about $215 million less. They also want revenue growth to go back to taxpayers. The legislation last year approved an income tax and corporate tax cut but Nixon vetoed it and they could not muster the numbers needed for an override.
"It's really unfortunate that this governor's only solution to our problems is to throw more money at our problems," House Speaker Tim Jones, R-Eureka, said. "I did not hear one substantial policy solution."
Nixon proposed $200 million in appropriation-backed borrowing to fund construction of a new 300-bed maximum and intermediate security psychiatric facility to replace the aging Fulton State Hospital. "Interest rates are low. Our credit rating is high. And the need is undeniable. Friends, let's roll up our sleeves, work together, and for the safety of all our communities, get it done this year, " Nixon told lawmakers.
Nixon also wants to offer a tax amnesty program to allow delinquent taxpayers to pay back taxes without accrued penalties or interest. It's expected to raise $61 million.
Nixon also proposed expanding the state Medicaid system under federal healthcare reform. Republicans rejected Nixon's proposal to expand Medicaid in fiscal 2014 and are expected to do so again.
The budget summary calls the expansion fiscally responsible and notes that it would infuse nearly $2 billion in federal funds into the state economy. The budget anticipates $77 million in healthcare savings in the first year, resulting in a shortfall if lawmakers don't approve it.
Under the federal program, the government picks up 100% of the expansion costs through 2016 before phasing down to 90 % in 2020. "Continued inaction not only impacts the uninsured but creates economic losses to communities and businesses throughout the state," the summary reads.
Missouri lawmakers in 2013 passed a $25 billion fiscal 2014 operating budget along with the $700 million to $800 million tax cut package that was vetoed, but did not action on two major bond packages to fund transportation and infrastructure projects. Bond supporters will try to drum up support in the new session.
