Governor Nixon delivers his third State of the State address tonight. The theme of this State of the State likely will resemble the themes the past two years: the state budget.
It seems the contents of the speech might focus on the same issues the governor has during his first two addresses to a joint session of the General Assembly. It might be the make-up of the audience that is different. Nixon, a Democrat, faces a legislature controlled by Republicans. Election victories in November have given Republicans a 106-to-57 advantage over Democrats in the Missouri House, 26-to-7 in the Missouri Senate. Nixon, looking toward re-election in two years, must reach compromise with Republicans to get any proposals through this year.
Still, whether Republican or Democrat, the budget remains the issue this year.
The financial meltdown of 2008 plunged the nation into recession and sent state revenue plunging. While there are signs the economy is making slow progress, it still is slow progress. In the previous budget year, Fiscal Year 2010, Governor Nixon withheld $900 million, $408 million from the General Fund. Withholdings haven’t been as severe this year. Still, Nixon has withheld slightly more than $300 million from the current state budget.
Federal funding is largely absent from the mix this year. Washington sent Missouri about a billion dollars previously. Only a fraction of that will be available this year. The shortfall state lawmakers face had been projected as high as $700 million. That has been whittled down a bit as state revenue has begun to bounce back. Budget leaders in both the Senate and House now project shortfalls more in the range of $300-to-500 million, still a big hole to fill, still a shortfall that will demand budget cuts.
Governor Nixon, House Budget Committee Chairman Ryan Silvey and Senate President Rob Mayer have reached agreement on the Consensus Revenue Estimate, which guides the budget process. They project state revenue to grow 4% during the fiscal year that begins July 1st. Even if revenue grows at that rate, it will still fall $700 million short of what the state collected in Fiscal Year 2008.
Missouri’s financial picture won’t brighten considerably until more people leave the unemployment rolls and consumers feel confident again and start spending.
The governor will deliver his State of the State address. The Republican response will be delivered by Lt. Governor Peter Kinder.