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Budget proposal outlines reduction in state spending

By   /   January 20, 2011  /   News  /   4 Comments

In contrast to previous years when tax revenue collections decreased and total state spending increased, the budget proposal by Missouri Gov. Jay Nixon for fiscal 2012 outlines higher revenues and lower spending.

Click for video of Missouri Gov. Jay Nixon outlining his proposals during the State of the State Address

Nixon outlined his budget proposal for fiscal 2012, starting July 1, during the State of the State Address Wednesday night, mentioning several times his proposals could be achieved without raising taxes.

How will we do it? “By fighting hard every day for every job,” Nixon told the House chamber in Jefferson City full of state representatives and senators. “By making government smarter and more efficient. By investing in strong communities to attract and keep good jobs, and by balancing our budget without raising taxes.”

As Nixon often does when giving speeches, he noted Missouri is one of only a few states with a AAA credit rating by all three rating agencies. “It’s a big vote of confidence in our state, and saves taxpayers millions of dollars a year in interest,” the governor said.

To keep the state’s fiscal house in order, however, Nixon warned some hard decisions will need to be made, specifically mentioning budget cuts. “These decisions are never easy, but they are necessary,” he said.

The details of the budget proposal for fiscal 2012, which are now available online, were left to Missouri Budget Director Linda Luebbering to explain during a briefing held before the start of State of the State Address.

Click for video of Missouri Budget Director Linda Luebbering providing a briefing about the budget

In a response to a question by Missouri Watchdog, Luebbering confirmed total state spending would actually be lower in the governor’s budget proposal for next fiscal year than in the current fiscal year.

The total state spending for fiscal 2012, recommended by the governor, is $23.3 billion compared to the estimated total spending of $23.8 billion for this fiscal year, ending June 30th.

As Missouri Watchdog has previously reported, total spending by the state has continued to increase despite talk of budget cuts and falling tax revenue collections, climbing by 13.6 percent from fiscal 2005 to 2009. Total spending equaled $19.62 billion in fiscal 2005 compared to $22.3 billion in fiscal 2009.

The total spending numbers are from the Comprehensive Annual Financial Reports.

Luebbering previously said the fiscal 2010 CAFR would be out by the end of December. But there was a delay in getting some numbers. Therefore, they are hoping to release the 2010 CAFR by the end of January.

Unlike in previous years when tax revenue collections were dropping, revenues are expected to increase throughout fiscal 2012. Luebbering cited the consensus revenue estimate announced last month by Nixon, along with state Senate Appropriations Chairman Rob Mayer, a Republican from Dexter, and House Budget Chairman Ryan Silvey, a Republican from Kansas City. Net general revenue collections are expected to be $7.295 billion in fiscal 2012, up 4 percent from expected revenue of $7.017 billion for fiscal 2011.

Adjustments and cuts are still needed, however, to balance the budget. During the budget briefing, Luebbering outlined what she described as $704.4 million in “budget solutions” proposed by Nixon for fiscal 2012:

  • $270.8 million by making the fiscal year 2011 expenditure restrictions permanent
  • $112.2 million by partnering with K-12 schools to carryover funds from fiscal year 2011
  • $67.4 million through cost containment in the Medicaid program
  • $64.9 million through the use of federal stabilization dollars in fiscal 2012
  • $53.6 million for a reduction of 7 percent for four-year higher education institutions
  • $38.1 million by further reductions to staff and other administrative savings.
  • $37.1 million in lowered debt costs, due to refinancing that will lower interest costs
  • $25.6 million in additional debt collections and use of other funds
  • $20.0 million from increased general revenue from a tax amnesty plan
  • $10.2 million for a reduction of 7 percent for community and technical colleges
  • $4.5 million from recommendations from the Tax Credit Review Commission

Click for video of Missouri Lt. Gov. Peter Kinder providing the Republican response to the State of the State

Following the State of the State Address by Nixon, a Democrat, Missouri Lt. Gov. Peter Kinder, who is expected to run against Nixon for the state’s top position in 2012, provided the Republican response.

They agreed on one thing — not raising taxes.

“Republicans will not raise your taxes,” Kinder said.

Nixon could be doing more to create jobs, Kinder said. “I believe that being governor means being Missouri’s loudest advocate, our biggest promoter, our strongest lobbyist. It means fighting for new jobs every day, not just when the cameras are rolling.”

Kinder also renewed his call for Nixon and Missouri Attorney General Chris Koster to join with other states working to overturn the federal health care law using the judicial system. Kinder filed a suit against the health care law in July.

Earlier Wednesday the state Senate passed Senate Resolution 27 urging Koster, a Democrat, to join other states in fighting the health care law and to defend the validity of Proposition C passed by voters in August.

Prop C was the first statewide vote concerning the  health care law, seeking to block the federal government from requiring residents of Missouri to buy health insurance. Last week, the state House approved House Resolution 39, a similar resolution calling on Koster to join with other states to stop the federal health care law.

“Nixon is still silent on the issue,” Kinder said. Republicans, who control the Missouri General Assembly, will not stay quiet, Kinder said. “We are prepared to take this battle all the way to the United States Supreme Court.”

By Brian R. Hookbrhook@missouriwatchdog.org, (314) 482-7944

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Brian formerly served as staff reporter for Watchdog.org.

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    Hey, great article. The US fiscal budget debate is awful! Congress needs to address it all immediately – we cannot keep spending more money than we bring in. It is exactly what got us into trouble, and the government has been doing the same thing as well. I’m interested to learn how it will all end… probably exactyl the same as before though. Anyhow, nice blog… I’m subscribed to your RSS feed now so I’ll be checking in regularly!

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    Thanks for your post it was very interesting.

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