State officials hope they have made the final budget cuts for this fiscal year, though the state budget director says it’s hard to overstate how bad the budget is.
So, just how bad is the state budget situation?
“This is the worst I have ever seen and I have worked in state budgeting for probably about 20 years,” says State Budget Director Linda Luebbering.
Luebbering says Governor Nixon’s decision to cut an additional $204 million from the budget is an effort to cope with a drastic drop in state revenue. Budget cuts for the fiscal year now total $634 million. Nixon vetoed $105 million from the budget approved by the state legislature during the past session. He then withheld $325 million when state revenue failed to meet the projections upon which that budget was based.
It has yet to meet those projections. In fact, state revenue is down 10% for the first quarter of this fiscal year, a $189 million hit. The recession has spread its pain. Receipts from individual income tax are down 10.7% with sales tax receipts down 6.8%. Corporate taxes are down 15.9%.
The drop off in state revenue has triggered budget cuts, some drastic. The latest action by the governor trims the state payroll by $12 million. Nearly 500 part-time positions have been eliminated. Some were vacant, but 363 part-time workers will lose their jobs. Luebbering says no one should consider such action effortless, even if the cut can be achieved through attrition.
“I want to be clear; the remainder of those positions would have been filled. So, it’s not that they are painless,” Luebbering says. “Those are positions, those are people, who would have been doing work. So, the 493 is the actual impact on the agency and their ability to get things done.”
The Department of Social Services will absorb the biggest loss, losing 183 part-time employees, 177 of whom will be laid off. The Department of Mental Health will lose 109 part-time positions, with most not currently filled, but still resulting in 31 people losing their jobs. Approximately 200 full-time positions will be eliminated, though it’s not known yet how many of those will result in lay-offs. Nixon Administration officials say the loss in personnel will be spread among all state departments, throughout Missouri, not just concentrated in Jefferson City.
The state workforce has been trimmed by more than 1,700 positions since the beginning of the year.
Some deep cuts to state programs have been approved, such as an extra $20 million to the state maintenance budget.
“That basically, with the earlier $47 million (Gov. Nixon withheld), will leave us $40 million over two years for maintenance and repair for state buildings,” says Luebbering. “We will be addressing only the highest priority life safety issues with this restriction.”
Medicaid spending will be trimmed by $32 million. Luebbering insists the savings can be achieved without anyone on Medicaid losing their eligibility. The state pays above the Medicare reimbursement rate for some services. That will be ended. Generic drugs will be used when possible.
A proposed $15.8 million increase in the school transportation budget will be withheld. The Life Science Research Board has been told it cannot distribute $13 million grants. Community programs and a pilot program planned for the Department of Mental Health has been scrapped, a savings of $12 million. The state received a $6.8 million bonus from the federal government for its accuracy in handling food stamps. Those funds were budgeted to enhance the Department of Social Services computer systems, but now will be used to prop up the beleaguered General Revenue fund.
Once again, basic school funding has been protected. The increase in transportation is the biggest hit education takes in this latest round of budget cuts. A Character Education program has been discontinued, a $375,000 cut. The Early Grade Literacy program will be cut by $80,000 by reducing the number of teachers to be trained by Southeast Missouri State University in Cape Girardeau. The Virtual Education program, a fairly new program, will be suspended to save $2.3 million. Luebbering says a dip in state gaming revenue as well as Lottery proceeds has contributed to the shortage of overall state revenue, forcing the cuts.
The Office of Administration has released the list of the latest budget cuts.