Apr 6, 2017 – Weekly Capitol Update

HOUSE APPROVES $27.75 BILLION STATE BUDGET FOR FY 2018

The Republican-controlled House of Representatives on April 6 passed a state spending plan for the upcoming fiscal year that provides K-12 schools with their smallest increase in five years yet claims to fully fund public education, calls for deep cuts on colleges and universities and eliminates an important tax break for low-income elderly and disabled Missourians.

The $27.75 billion state operating budget for the 2018 fiscal year now moves to the Senate. Because new Gov. Eric Greitens, a Republican, was several weeks late in submitting his budget proposal, the process is far behind scheduled. With a May 5 constitutional deadline to complete the budget, just four weeks remain for the Senate to approve its version of the appropriations bills and for House and Senate negotiators to resolve differences between the chambers before final votes can be taken to send the budget measures to the governor.

If lawmakers miss the budget deadline, they would be prohibited under the Missouri Constitution from taking further action on the appropriations bills during the final week of the legislative session, which ends May 12. As a result, the governor likely would have to call a special session to start the budget process over and pass a spending plan before the FY 2018 fiscal year begins on July 1.

The House budget calls for a $48 million increase in basic state funding for local school districts – by far the smallest increase in education funding since FY 2013. In the intervening four years, FY 2014 through FY 2017, annual increases in K-12 appropriations have averaged nearly $88 million.

However, last year the Republican legislative majority rewrote the state education funding law over Democratic objections to lower the amount of money needed to claim full funding by more than $400 million. As a result, a $48 million increase is considered full funding under the revised law, which Democrats argue merely creates the illusion of providing adequate education spending.

While local public schools would receive a modest funding boost, higher education institutions would take a big hit to their state appropriations. Funding for most four-year schools and community colleges would be cut 6.6 percent, while the University of Missouri System would take a 9 percent hit to its basic funding. However, the House plan levels that apparent disparity by including funding for several stand-alone UM System initiatives that the governor had proposed eliminating.

When Greitens presented his proposed budget in February, he proposed saving about $52 million by eliminating nursing home and in-home care services for more than 20,000 disabled Missourians. Although the House budget rejects that plan, it backfills the revenue by eliminating the so-called “circuit breaker” tax credit for low-income elderly and disabled Missourians who rent their homes. Individual recipients receive an average credit of $535 a year.

 

LAWMAKERS SEND MESSAGES WITH BUDGET PROVISIONS

While the purpose of appropriations bills is to provide state government the legal authority to spend money, it has become increasingly common for lawmakers to use the budget measures to send messages to state agencies about things they don’t want money spent on. However, these budget directives are largely non-binding and unenforceable.

One such directive purports to block the Missouri Department of Transportation from spending money on toll roads. Another says that no funds can be used for DWI checkpoints. Two others separately bar universities from offering in-state tuition to Missouri students brought to this country illegally as children and seek to prohibit Planned Parenthood from receiving Medicaid funding for providing non-abortion women’s health services.

None of these purported restrictions is legally binding, however, as they don’t appear in the statutory language of the budget bills, but instead are in the title clauses that summaries what the bills do. The Missouri Supreme Court has said such clauses aren’t actually part of legislation.

 

NET STATE REVENUE UP 4.3 PERCENT SO FAR IN FY 2018

Net state general revenue collections for the first nine months of the 2017 fiscal year increased 4.3 percent compared to the same period in FY 2016, going from $6.2 billion last year to $6.47 billion this year. Net general revenue collections for March 2017 decreased by 0.2 percent compared to those for March 2016, going from $757.1 million last year to $755.6 million this year.

General revenue collections must grow by 7 percent to cover all of the spending authorized last spring by the Republican-controlled General Assembly. Because that is highly unlikely to happen, current Gov. Eric Greitens, a Republican, and his predecessor, Democrat Jay Nixon, implemented about $350 million in combined midyear spending cuts to keep the FY 2017 budget in balance.