November 22, 2014

Gov. Nixon presents ideas to downsize government, talks about state budget cuts

Nixon MU 040710Gov. Nixon today presented ideas to “right-size and refocus” state government with business students, faculty and executives gathered at the University of Missouri-Columbia.

AUDIO: Nixon’s speech 26 min MP3

He talked about consolidating space and services, combining agencies, trimming state travel and eliminating state jobs.

“Let me give you a concrete example,” Nixon says. “We’re in the process of terminating our lease on an 11,000-square-foot Animal Health Lab in Jeff City. You know how many employees were rattling around in that 11,000 square-foot space? Ten. The heating bill alone was close to $23,000 a year. After we consolidate that lab with our new, and much more compact State Health Lab, we’ll save taxpayers $157,000 a year.”

Nixon gave another example using the state’s 114 separate Family Support Division offices, all of which do the same thing. He says the state will consolidate those offices, also to save taxpayer money.

Combining departments is another plan: Elementary and Secondary Education and Higher Education; Highway Patrol and Water Patrol.

Nixon also recommends modernizing pension and health care benefits for state employees, both of which have bipartisan support from the legislature, he says.

Tax credits, jobs growth and infrastructure were other topics Nixon touched on during his address.

Nixon met with reporters following the address and answered questions regarding the address as well as the state budget process.

AUDIO: Press conference with Nixon, reporters [Mp3, 17:08 min.]

Nixon also traveled to Washington University in St. Louis to address business leaders and students there.

Full text of Governor Nixon’s speech:

Good afternoon everyone, and thank you for being here. My thanks to Chancellor Wrighton and Dean Gupta for this opportunity to speak with you today. I’m pleased to have with me David Kerr, Director of the Missouri Department of Economic Development. David is a key member of my team, and will be working with leaders in the business community and the legislature to drive the strategic development initiatives I will discuss today.

About three weeks ago, I met with business leaders in Springfield, and laid out my blueprint to recalibrate the size and scope of state government.

It called for a clear-eyed reassessment of what government can do – and can’t do – for our citizens.

That’s what this blueprint is all about: refocusing priorities and doing fewer things, but doing them more efficiently, effectively, and with greater accountability to taxpayers.

This afternoon, I chose another group of business leaders – some of the best and brightest minds of today, and the students who will become the business leaders of tomorrow – to report back on our progress. In just three weeks, we have made solid headway.

Other states facing serious economic challenges have been paralyzed by partisan bickering, or distracted by desperate, untenable solutions.

Not the Show-Me State.

When there’s hard work to be done, we roll up our sleeves and get it done. When there are hard choices to be made, we make them…and see them through.

Two weeks ago, in consultation with my cabinet, the Senate spent an entire day working through hundreds of ideas for reform from the public. I appreciate that collaboration.

Legislators from both parties and in both houses, are working together to reform government and move this state forward.  That, to me, is the difference between politics and public service.

Missouri, like most states, faces unprecedented economic challenges. Three months after we prepared the budget for 2011, our economic models are clearer.

Economic forecasts show the state economy is starting to tick upward. Consumer spending is slowly rising.

Some sectors of our national economy, from manufacturing to health care, are starting to hire again.  Many economists and policy experts agree that our economy is headed in the right direction.

Unfortunately, even as the economy improves, state revenue continues to lag, and will likely remain behind the curve for the remainder of the year.

That presents us with a challenge familiar to all hardworking families and businesses across our state. We have to balance the budget, get savings wherever we can, and be smart about spending.

As a fiscally conservative Democrat, I believe government must be efficient, effective, and economical.

Thrift is a virtue for all seasons: it serves us well in flush times, and is an absolute necessity in lean times.

My administration headed down that track on Day One, and we’ve stuck to it.

In the 15 months I have been Governor, I have:

  • Made budget cuts totaling $ 1.2 billion;
  • Trimmed the state workforce by eighteen hundred positions. Those were difficult reductions, and we will be standing by those folks as they transition to other jobs.
  • We cut the state energy bill by 6 percent, saving taxpayers $3 million; and
  • We reined in spending in every department.

But budgets are about investing, too. And as we made the cuts necessary to keep us in the black, we were careful to protect our priorities, like education, job training and public safety.

Our early action, frugality and fiscal discipline continue to pay off.

National economic experts, like Moody’s, consider Missouri one of the top states to lead the recovery.

Missouri is the only state in the Midwest with a triple-A bond rating from all three ratings firms.

Those rankings aren’t window-dressing; they are a vote of confidence with real-world consequences. They save taxpayers millions of dollars on the costs of financial transactions, and are a signal to investors that

Missouri is where smart money goes to grow.

Unlike 29 other states that have raised taxes to balance their budgets, we will continue to hold the line on taxes in Missouri.

Working in a prudent, bipartisan manner, we have kept the ship steady in rough seas before, and we will do it again. This blueprint will see us to safe harbor.

Our most pressing challenge is closing a $500 million budget gap, caused by lower-than-normal state revenue.

That means we must continue to shrink state government, cut waste, trim the workforce and restructure departments.  At the same time, we must continue to invest in the excellent public services our citizens rely on every day:

  • We need to support passionate teachers who bring their subjects to life in our classrooms, from pre-school to graduate school.
  • We need to provide the tools and technology our Highway Patrol needs to catch criminals and get drunk drivers off the road;
  • We need to stand by the corrections officers who walk the corridors of our prisons at night.
  • And we need diligent, well-trained inspectors to safeguard our elderly loved ones in nursing homes.

By taking a long, hard, look at all departments and all programs, we can − and we will − lean up government.

And we will continue to support vital state services, and the professionals who provide them.

My team is hard at work on a top-to-bottom review of every state lease, deed, contract and asset. We are reducing our lease obligations, consolidating operations and selling unneeded real estate.

Over the past three weeks, we’ve found places to slash unnecessary space. By June 30, we will eliminate 48,000 square feet of leased space – with more to come by end of calendar year. These reductions will save taxpayers at least $3 million a year, and as we find more excess space, those savings will grow.

Let me give you a concrete example.

We’re in the process of terminating our lease on an 11,000-square-foot Animal Health Lab in Jeff City.

You know how many employees were rattling around in that 11,000 square-foot space? Ten. The heating bill alone was close to $23,000 a year.

After we consolidate that lab with our new, and much more compact, State Health Lab, we’ll save taxpayers $157,000 a year.

Here’s another example.

The Family Support Division now has offices in every county.  That’s 114 separate offices – some just a few miles from each other − doing the same thing. We’re going to consolidate offices to save space and taxpayer dollars. And wherever possible, those important family support services will be available online.

State travel is another area where we can get real savings.

Last year, state employees drove a total of 183 million miles. I’m still trying to wrap my head around that number, because the Earth is only 93 million miles from the Sun.

I have ordered state employees to reduce travel by 10 percent next year. That will save taxpayers more than $2 million a year.

We’ve reduced the state mileage reimbursement for personal vehicles by 5 cents a mile. That will save taxpayers more than a million dollars a year.

By renegotiating state contracts for rental cars, we’ve saved taxpayers another quarter of a million dollars a year. And by consolidating fleet operations in Jefferson City and selling state vehicles, we’ll save even more.

Right-sizing state government will also require reducing the size of the state payroll.

In the coming weeks, we’ll trim a thousand more full-time positions from the state budget. I never make such decisions lightly, but they’re necessary. We’ll do everything we can to help those folks land on their feet.

With the help of the Legislature, we’re also going to eliminate three extra state holidays, including Harry Truman’s birthday. Every state holiday costs taxpayers more than a million dollars; we’re talking about real savings in tough times.

Bills already have been filed to eliminate two of those holidays, and I will eliminate the third.

As one fiscally conservative Democrat to another, I think Harry would come down on the side of thrift.

These immediate actions will help us close the budget gap. But we also must take a critical look at the structure and scope of state government. My blueprint contains a number of proposals to do just that, and they’re gaining traction.

I proposed merging the Department of Elementary and Secondary Education and the Department of Higher Ed into one Department of Education. We are working with the departments and legislators to draft a bill to do that.

I suggested that we consolidate the State Highway Patrol and Water Patrol, and bipartisan leaders have stepped up to file that bill.

I recommended modernizing pension and health care benefits for state employees, and those bills have bipartisan support as well.

I appreciate the legislative leadership, cooperation and support on these important initiatives.

I am also pleased that we’re progressing toward an agreement that will correct an inequity in the amount of scholarship aid for higher education.  Needy students deserve the same level of support, no matter where they decide to go to college, and I applaud the chang

We’re in the process of re-evaluating the state’s investment in alternative fuels. And we are working with the Legislature to determine a level of support that is sustainable.

While we’re on the subject of sustainability, let’s talk about tax credits.

Over the last 10 years, the use of state tax credits has ballooned to $585 million a year; that’s 86 percent growth.

Today, there are more than 60 different state tax credits and programs.

These were passed with good intentions, and were designed to create jobs, strengthen communities and spark economic development.

In many cases, tax credits are producing a positive return.  But some aren’t meeting that standard. When it comes to economic development, it is the state’s responsibility to determine which state incentives are delivering for our taxpayers … and which ones aren’t.  Those that don’t perform have got to go. Because every dollar we spend on tax credits is a dollar that can’t be spent on another priority, like health care, job training, or law enforcement.

We have put forward a comprehensive reform plan that puts an annual cap on all tax credit programs, and lays out clear, consistent rules.

In addition − and this is critical – our plan will give the Department of Economic Development more discretion. Under the new system, it will be empowered to invest in projects with the highest likelihood of delivering a good return on taxpayers’ investment: jobs and economic growth.

This reform will give taxpayers cost-savings in the near-term, but will also position the state for more strategic investment and growth for many years to come.

Action is already being taken in both houses. I am pleased that my tax credit reform plan is being seriously considered by legislators, and I’m confident that by working together we’ll deliver a much better ROI for Missouri.

Let me be clear about one point on tax credit reform: We will NOT touch the circuit-breaker tax credits that help our seniors and disabled folks stay in their homes. They’ll still be protected, as they should be.

These cuts, consolidations and reforms will overcome our budget challenges today, and put us in prime position to accelerate out of this downturn.

But Missouri will continue to face budget shortfalls until more folks are back to work. It’s a truism that you can’t cut your way to prosperity. Nobody understands that better than the business community.

Jobs drive recovery, especially in an economy where consumer spending accounts for more than 70 percent of GDP.

That’s why creating jobs has been my top priority since the day I took office.

We’ve got to lay a granite foundation for long-term economic growth. And that means passing my 2010 jobs package.

Last year, our bipartisan jobs plan helped Missouri businesses create new jobs and grow. And our small-business loan program is helping more Missouri entrepreneurs realize their dreams.

This year, I put forward a three-part jobs plan that will build economic momentum, and position Missouri to be a leader in the high-tech industries of tomorrow.

I am confident that we will come out on the other side of this downturn with more efficient government, and a more vibrant economy.

We have made real progress on my jobs plan.  Bills with bipartisan sponsors have been filed to advance Missouri First, my loyalty program to reward long-time Missouri businesses.

There is also broad support for the Missouri Science and Innovation Reinvestment Act, the second piece of my jobs plan. This is a sharp new tool in the state’s toolbox, one designed for the cutting-edge industries of tomorrow. I call on the legislature to keep these important bills moving toward my desk.

The third part of my jobs plan, Training for Tomorrow, is investing millions of dollars into training more students to be ready to work in industries that are hiring now. Every public community college in the state will be receiving money through this program.

Every idea in my blueprint is a product of my firm belief that Missouri’s brightest days lie ahead. I’m an optimist by nature; always have been, always will be.

The bipartisan efforts underway in the legislature, and the cost-cutting by my cabinet, will resolve our immediate budget challenges.

They will also ensure that Missouri emerges with a leaner, more efficient government.

And these efforts will only be aided by continuing to invest in the right priorities.

For two years, we’ve protected our K-12 classrooms from the kinds of drastic cuts we’ve seen in other states.

For two years, we’ve provided stable funding for higher education that allowed our colleges and universities to freeze undergraduate tuition, helping thousands of Missouri families send their kids to college.

We’ve invested $40 million in training more doctors, nurses and other health professionals through our Caring for Missourians program, including a significant investment right here at Mizzou.

These grants will train hundreds more skilled professionals to meet the critical health care needs of our state today and tomorrow.

Missouri has tremendous assets − from our world-class research institutions like yours, to our innovative and agile community colleges, to our thriving life sciences corridor and our beautiful state parks.

By striking the right balance between saving and investing, Missouri will be stronger, more competitive and more prosperous than ever before.

I know there are a lot of business school students present today, so I’d like to speak directly to you.

When you are ready to graduate, I want you to be able to take advantage of the limitless opportunities in Missouri, in every sector of our economy – whether your passion is biotechnology, health care or renewable energy.

Working with leaders in the public and private sector, including the Regional Business Council, RCGA and Civic Progress, we are creating a culture of entrepreneurial excellence and collaboration. I want Missouri to be known as a hotbed of ideas and innovation, where start-ups can quickly take root and world-class companies thrive.

So that, when you are looking for your first big job – or ready to start your own business – you invest your time and talents here.  You grow your business here. You take the risk and reap the rewards here.

That’s my vision for Missouri’s future. And with help from leaders like you across the state, we will achieve it.