Missouri’s House Budget Committee Chairman plans to hammer out spending issues soon.
Republican Representative Scott Fitzpatrick of Shell Knob received a call from incoming GOP Governor Eric Greitens Tuesday. He says the two plan to meet after the Thanksgiving weekend to figure out where to cut spending.
After the state started the fiscal year in July with $200 million less than expected, current Democratic Governor Jay Nixon withheld $115 million, followed by an additional $57.2 million in cuts in late September after the legislative veto session. He restored $8.7 after an auto settlement with Volkswagen brought in more revenue.
Fitzpatrick says further restrictions will have to be made, but he can’t say what state agencies or programs will be affected. “You’ve got to just sit down with a pen and a list of appropriations, and start working through the things that are out there” said Fitzpatrick.
“It’s a harder question to answer today than it would have been at the beginning of the fiscal year. The reason that that’s the case is because, being almost halfway through the fiscal year, a lot of the money that’s already been authorized has already been spent.”
Fitzpatrick says Greitens will need to determine what additional restrictions need to be made after he’s sworn into office in January.
As far as how much money will need to be withheld in the future restrictions, Fitzpatrick predicts it’ll be in excess of what’s already been done by Nixon. “Right now there’s already $150 million in general revenue restrictions in place. And I think that on a conservative basis, I think that you could say another $200 million is needed.”
The state’s total budget is about $27 billion. Of that money, $9.3 billion is allocated to general revenue for discretionary spending by the state legislature. According to Fitzpatrick, monthly revenues since July have grown by roughly 3.5 percent, which is about 4 percent below what’s needed to restore all spending cuts from the general revenue fund.
Beyond balancing the budget in the current fiscal year which runs through June 2017, Fitzpatrick sees a much larger challenge. He thinks it’ll be difficult to find money to cover the cost of Medicaid and other related programs which have grown significantly over the past several years. Those programs are required by law to be funded.
Fitzpatrick says their costs will grow by $550 million in the next fiscal year. “You’ve got to essentially grow almost six percent just to fund what departments are considering mandatory items. We’ve never assumed, since I’ve been here, revenue growth of six percent.”
Fitzpatrick thinks the state’s biggest challenge moving forward will be to curb the cost of those programs. He says the overwhelming majority of those expenses are for Medicaid.