Missouri Governor Jay Nixon (D) says the state is doing well financially. His response comes after his latest budget restrictions of more than $57 million.
“We continue to see good growth in jobs. We’ll continue to move forward. I think everybody saw a little tick down in quarter four relative to what our expectations were, but we’re still on a good track,” says Nixon.
House budget committee vice chairman Scott Fitzpatrick (R-Shell Knob) agrees that the state is financially sound, but he says if policy involving social services programs like Medicaid does not improve soon, difficult decisions must be made.
In this fiscal year’s budget passed by the legislature and signed by Nixon, Missouri’s $27 billion budget includes more than $9.2 billion for the Department of Social Services.
The legislature overturned this week the Governor’s veto of a bill that creates an income tax deduction for farmers who receive federal disaster or emergency aid. Nixon blamed the legislature’s veto override of this measure for causing him to restrict $57 million in the state budget. He says the bill will lead to an estimated $50 million budget shortfall because the tax deduction can go back to January 2014.
A University of Missouri study says the maximum tax loss to the state would be $19.1 million.
“The study they were based on didn’t include seven of the programs in the bill and by the way, that study did not include fewer than 50 head of cattle. We have the average of 38,” says Nixon.
Fitzpatrick disagrees with Nixon’s reasoning.
“Most of the time we have these fiscal notes on bills, they are forward looking. They are based on projections about what will happen. The whole fiscal note is based on payments that have already been made and tax returns that have already been filed and sent in,” says Fitzpatrick.
He says the Department of Agriculture’s 2014 data shows $17.5 million in agriculture disaster payments were made. Fitzpatrick says there has been very few payments made in 2015 and so far this year.
Many Republicans, including Fitzpatrick, say the reason Nixon is restricting state funding doesn’t have to do with the agriculture disaster legislation.
“The issue is revenue and the additional expenditures that we are expected to have to make in Medicaid. Those are the only reasons right now that he can justify withholds.”
The other veto override that Nixon says contributed to the restrictions is a bill that will exempt businesses from paying sales tax for recreational classes they provide like yoga and gymnastics.
The Department of Revenue projects a revenue decline of $8 million this fiscal year from the measure.