Governor Nixon said today that Missouri must be ready to use an economic development tool made available to the state by Congress.
Nixon spoke with Capitol reporters after addressing the Missouri School Boards Association meeting at the Capital Plaza Hotel in Jefferson City. Nixon acknowledged that the $787 billion economic stimulus package approved by Congress and signed into law by President Obama is daunting for anyone trying to read through it and comprehend it all.
"Well, first of all, it’s a complicated process," Nixon said, "but what we’re going to receive is an opportunity to get Missourians back to work."
Nixon’s staff is pouring over the bill, attempting to understand its impact on Missouri. The bill contains a combination of spending, aid and tax cuts designed to jump start a stalled and faltering economy. The bill contains $87 billion to help states meet the rising cost of Medicaid. At one time, the package promised massive help for states with budgets sinking deep into the red. The help remains, but was drastically cut during negotiations. The final deal cut $25 billion from the proposed state fiscal stabilization fund, reduced spending to extend health insurance for the unemployed and eliminated approximately $16 billion from a line item for school construction.
Nixon is hoping that Missouri might squeeze a bit more out of the stimulus package if it is prepared to spend right away.
"The states that do that the best, the states that invest in human capital, the states that use those resources to jump start their economy will get a better benefit than states that don’t," Nixon stated, noting that the bill contains competitive grants and "use it or lose it" provisions.
The Missouri Department of Transportation is ready to use federal money. The State Transportation Commission awarded a contract as soon as President Obama signed the legislation. The $8.5 million Osage River Bridge project at Tuscumbia is believed to be the first transportation project in the nation being built with federal stimulus money.
Some state lawmakers have stated Missouri shouldn’t use one-time money for on-going expenses. They say that accepting the stimulus money might simply postpone the inevitable and make the budget hole worse in two years.
Nixon countered that the downturn in the economy has increased the state’s social costs, from increased Medicaid expenditures to sending out more unemployment checks. Nixon said a stronger economy will cut those expenses and raise tax revenue flowing to the state.
"I’m not trying to think, right now, two and a half years from now what a budget might look like starting July 1 of 2011 or 2012," Nixon told reporters, "I have 219,000 Missourians out of work. My job is to get them back to work and get them back to work as fast as we can."