Democratic Gov. Jay Nixon said he will eliminate or freeze more than $1.1 billion from the state’s budget beginning July 1, including 260 state jobs.
“As governor, it’s my responsibility under the Missouri Constitution to keep the budget in balance by ensuring the spending authorized by the General Assembly does not exceed available revenue,” he said in a statement to reporters. “These actions are not easy, but they are absolutely essential to putting the budget back in balance and keeping the state on a fiscally responsible path.”
Nixon vetoed more than $275.7 million in state spending. In addition to the vetoes, Nixon withheld $846.3 million from other programs.
Nixon withheld more than $100 million from the foundation formula for public K-12 schools. The Legislature had approved adding $114 million to the foundation formula. Using a surplus revenue fund, that would be bumped to $278 million if revenues were to meet Nixon’s projections. A spokeswoman for the Missouri Department of Elementary and Secondary Education said Tuesday that she did not know how much new foundation money would go to specific schools.
As he did during last year’s income tax-cut fight, Nixon is using the withholdings in a bid to force the Republican-controlled Legislature to sustain his vetoes of 10 tax breaks approved this spring. He has dubbed them “Friday Favors,” noting that most of the tax breaks were quietly passed on the Legislature’s final day of session to the tune of $425 million for the state’s coffers and more for localities. They include sales tax breaks for dry cleaners and fitness centers, and including graphing calculators in the state’s annual back-to-school sales tax holiday.
Nixon attributed about $786 million of his cutbacks to the state’s general revenue fund (paid for by tax receipts) being out of balance. An additional $275 million was cut because of other issues, such as diminished lottery proceeds and tobacco settlement income, as well as the Legislature’s failure to pass “tax amnesty.”
State Rep. Tom Flanigan, R-Carthage, sits on the House Budget Committee. He questioned how much of the money being withheld was based on Nixon’s concerns about the tax-break bills and how much was actually based on the state’s budget crunch. As of Tuesday, he said, state revenues were down .23 percent, and the state still owes millions in tax refunds.
STATE BUDGET DIRECTOR LINDA LUEBBERING said in an email Tuesday that $425 million of the withholdings were because of the tax breaks approved by the Legislature. Other elements, she said, included $400 million because of the state revenue shortfall; $101.8 million in connection with a tobacco settlement and failure of the Legislature to pass “tax amnesty legislation”; and $60 million in “other assorted issues.”