A $23 billion spending plan for the next fiscal year has been approved by the House, a budget still bearing the marks of a sluggish economy yet to fully emerge from the recession.
The House completed the amendment process yesterday and moved to final votes on the 13 budget bills this morning. The process went quickly and smoothly with little of the partisan rancor of past budget battles, partly a result of a more cooperative spirit in the House Budget Committee, partly a result of the realization that the budget picture simply hasn’t brightened much over the past three years.
The budget approved by the House holds the basic formula for funding public schools steady at just barely more than $3 billion. That funding mark is threatened, though, in the Senate. Senators have yet to approve a supplemental budget bill (HB 15) that allocates $189 million in federal funds to local schools. Some senators suggest the state reject the money to send a message to Washington that Missouri doesn’t support deficit spending. The federal money has been incorporated into the budget approved by the House and rejection of it would throw off efforts to keep school funding stable.
Higher education had been spared cuts in the current fiscal year. A drop in state tax revenue forced lawmakers to approve a 7% cut to the state colleges and universities for the coming year. The cut might be offset somewhat by an addition made by the House. House members approved adding $12 million for Prepare to Care, a competitive grant program for which colleges can apply to fund education in health care related fields.
Medicaid costs continue to eat up a substantial portion of the state budget. The Medicaid budget, spread over a number of departments, now totals $8.4 billion, more than a third of the entire state budget, easily the largest expenditure by the state. That total is half a billion dollars more than the Medicaid expenditures in the current budget.
A couple of sources of money helped boost the bottom line and soften the blow of budget cuts for the coming year. Gov. Nixon withheld approximately $200 million from various state departments and then made the withholdings permanent, creating a fund balance to begin the fiscal year July first. The state still has $277 million from federal budget stabilization funds that it can plug into its General Revenue account.
Tax revenue, which dropped drastically during the recession, is expected to begin rising again in the next fiscal year. The Consensus Revenue Estimate, which the House, Senate and the Nixon Administration agreed to, projects tax revenue to grow by about 4% next year.
The budget bills, HB1 through HB 13, now move to the Senate for its consideration.