The Missouri legislature is beginning to examine the state budget, having just completed its weeklong spring break. After revenue growth estimates were adjusted downward from 3.5% to 1.9% for the current fiscal year, maintaining present funding levels isn’t expected to be a problem
In recent years, both current Governor Eric Greitens and previous Governor Jay Nixon have had to make painful withholds to state agencies which reduced funding for some key services.
This year, House Budget Committee Chairman Scott Fitzpatrick, R-Shell Knob, says revenues are tracking at a rate of roughly 3.5% growth and would be closer to 5% if the faster dispersal of 2017 tax returns were to be taken into account.
“We’ve paid out about $160 million more in refunds this year at this time than we paid out at this time last year,” said Fitzpatrick. “We’ve had a 23% increase in refunds. I think a lot of that is because the cash flow is a little bit better.”
Just before leaving for the spring break, Fitzpatrick’s committee passed a budget covering most of the state’s $9.8 billion in general revenue funding for the upcoming fiscal year that starts in July.
The full House will start marking up that product Tuesday. Once agreed to, the budget will then be sent to the Senate.
The single biggest expense in the general revenue fund is spending on elementary and secondary education, also known as K-through-12.
The state agency which oversees K-through-12 public schools asked for an increase of $98 million to fully fund the state’s education foundation formula.
After Republican Governor Eric Greitens called for only a $50.5 million boost to public schools in the budget proposal, the House Budget Committee added the balance to fully fund the formula at nearly $3.5 billion. The vote in committee was 33-0.
The second largest portion of the general revenue fund is distributed to Medicaid, the federal health care program for low-income families, seniors, and disabled people. The state agency in charge of Medicaid asked for roughly $1.949 billion.
It’s not clear in what the committee passed if the program will receive every dollar sought. Two Democrats and one Republican voted against the Medicaid portion of the budget in committee.
Another important need seen by lawmakers is to increase wages for Missouri’s state workers who are the lowest paid public employees in the country.
In January, Governor Greitens proposed boosting pay by $650 for state employees who earn $55,000 or less per year. The House Budget Committee was more generous, settling on a $700 raise for state workers making less than $70,000 per year and a 1% pay increase for all employees earning more than that amount.
Fitzpatrick says the committee’s plan would ensure that all employees receive some form wage increase. “We’re trying to lift from the bottom, but we also wanted to make sure that the people at the other end of the salary range also got at least a cost of living adjustment,” Fitzpatrick said.
According to Fitzpatrick, the overall increase in general revenue spending to spending for public workers totals $20 million.
The committee also approved money for a Pay For Performance study which would analyze the state workers who are the least and most underpaid, based on wages for similar jobs in the open market. Fitzpatrick says the research would provide a means to send more money to the workers who most deserve it.
“If we’re just throwing money at people who, on a market analysis, are already either paid a proper amount or above the market, then we should be taking money that we otherwise have been investing in those job classes and investing it in the ones that are way below market,” said Fitzpatrick.
If the legislature clears money to finance the Pay For Performance study, its findings could be used to compensate state workers in 2019.
The committee made about 30 changes to the budget Fitzpatrick introduced before passing it on to the full House. He thinks the spending plan will easily balance with revenue projections.
With no need to find money through any other source, Fitzpatrick would still like to eliminate a tax credit that was on the table to be sliced last year when money was tight.
Like some other Republicans, he’d like to eliminate the renter’s portion of a tax credit for low-income senior homeowners known as “circuit breaker”. Doing so would bring $55 million into the state, while thousands of people would lose a maximum of $750 the yearly tax credit affords them. Fitzpatrick thinks it’s improper to extend tax credits earmarked homeowners on to renters.
As it stands now, the House proposal coming out of committee will leave higher education $30 short on funding. Senate Appropriations Committee Chairman Dan Brown, R-Rolla, has said he finds funding to colleges and universities to be in a “crisis” and has indicated he would spar with the House to more adequately fund higher education.