Nixon administration says budget restriction ballot question could harm state’s AAA credit rating

JEFFERSON CITY, Mo. — When Missouri voters go to the polls next month, they will be asked a constitutional question about the balance of power between the General Assembly and the state’s chief executive.

Amendment 10 asks voters if they want to change the constitution “to provide a legislative check on the governor’s decisions to restrict funding for education and other state services.”

Gov. Jay Nixon, a Democrat, has at times used his power to withhold some of the funding for education that was appropriated by the Legislature to offset what he has described as “special-interest tax breaks” in order to balance the budget. Those restrictions have in the past included millions for public schools and higher education.

This summer, Nixon vetoed a number of tax breaks and argued that if the veto was overridden by the Legislature during its September session, it would have thrown the budget out of balance, so he withheld money until the session was over.

His opponents, however, have argued that the governor is using his power to restrict spending as political leverage against the Republican-controlled Legislature’s efforts to reduce taxes.

“There was a strong belief in the Legislature that there was not a fiscal justification (for Nixon’s withholds), particularly as they related to education,” said state Rep. Todd Richardson, R-Poplar Bluff, who pushed the amendment through the Legislature.

“I’ve heard from a number of people who are concerned about how the governor has been managing the budget,” Richardson said.
He also said the question is bigger than a mere political fight.
“This is an area that is more about the structure of government and the relationship between the branches than anything else,” he added.

Nixon’s office, meanwhile, has labeled Amendment 10 “fiscally irresponsible.” Nixon spokeswoman Channing Ansley, in an email to Friday, said the governor’s power to restrict spending to balance the budget is one that “safeguards against overspending by the Legislature.”

“This authority to control spending is vital to keeping the state’s fiscal house in order and is routinely cited by the ratings agencies in reaffirming Missouri’s AAA credit rating,” she said.

Ansley pointed to a July report from the Standard & Poor’s rating service, which assigns credit ratings to each state. Missouri’s rating is AAA, its top rating.

In the report, S&P noted: “We believe this amendment could potentially weaken the state’s strong governmental framework to make midyear budget adjustments, which in our view could potentially lower the rating.”

“This amendment appears to be another attempt by the Legislature to grow government beyond its means,” Ansley said. “Like past governors, Gov. Nixon has used his constitutional authority to balance the budget and prevent government from spending beyond its means.”

In 2011, the issue of withholds first became a challenge for Nixon. Tom Schweich, the Republican state auditor, sued Nixon, alleging the governor violated the Missouri Constitution by restricting more than $172 million in the Legislature’s budget in order to pay for unexpected costs associated with the state’s response to the tornado in Joplin.

The question Schweich posed at the time is the same concern being posed now by Richardson and other lawmakers. Schweich’s complaint argued that the constitution allows the governor to reduce the money appropriated for state agencies only if the state’s bank account is running low as opposed to the preventative measures taken by Nixon during his political clashes.

The governor won at the time, although the Supreme Court did not actually decide on the underlying issue. The Schweich case was thrown out by the Missouri Supreme Court on a technicality. Since then, the auditor has doubled-down on his criticism.

“When actual revenues are above estimates, the constitution very clearly precludes the governor from withholding money,” Schweich wrote in an audit earlier this year. “It looks like it was more of a political tool than a budgetary tool.”

The amendment also includes a provision that would “prohibit the governor from relying on revenue from legislation not yet passed when proposing a budget,” a tactic used by both the Legislature and the governor often when representing their budgets.

To beat Nixon, the Missouri Club for Growth – a conservative aligned group – announced last week a major statewide ad by topping $1.2 million to campaign for the measure.

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