Oct. 22, 2015 – Weekly Capitol Update

NIXON FREEZES $46.1 MILLION DUE TO BUDGET SHORTFALL

Gov. Jay Nixon on Oct. 19 restricted $46.1 million in appropriations authority to keep the state budget in balance in light of an unexpected revenue shortfall following a recent court ruling that will cost the state $50 million in tobacco settlement money. The appropriations authority limited by Nixon primarily consists of new or expanded spending added to the 2016 fiscal year state budget.

Missouri receives annual payments under a national settlement it and most other state reached with major tobacco producers in the late 1990s over the industry’s deceptive marketing practices. In 2013, an arbitration panel ruled Missouri hadn’t diligently performed some of its obligations under the settlement. Although a St. Louis Circuit Court judge overturned the arbiter’s ruling in 2014, the Missouri Court of Appeals Eastern District reversed the lower court on Sept. 22.

Attorney General Chris Koster intends to appeal the ruling on behalf of the state, but the case isn’t expected to be resolved before the 2016 fiscal year ends on June 30. Therefore, as the case currently stands, Missouri must pay a $50 million penalty for its alleged non-compliance with the tobacco settlement.

“This unexpected loss of funds must be accounted for through spending restrictions to keep the budget in balance and our AAA credit rating intact,” Nixon said in a statement. “In taking these necessary actions, we have made every effort to minimize the impact on vital services by reducing spending from new programs yet to get underway and funding increases that would grow the size of government.”

The Missouri Constitution grants the governor the authority to unilaterally restrict state spending to ensure the state budget remains balanced. In 2014, however, 56.8 percent Missouri voters ratified a constitutional amendment pushed by Republican lawmakers that gives the General Assembly the power to reject the governor’s budget-balancing actions. As a result, the GOP-controlled legislature could seek to overrule Nixon’s restrictions when it reconvenes in January. Such action, however, would risk knocking the budget out of balance.

 

STL REFUNDS $5.6 MILLION IN RED-LIGHT CAMERA TICKETS

St. Louis City is mailing out refund checks totaling $5.6 million to roughly 56,000 people who paid fines after receiving red-light camera tickets issued under a city ordinance the Missouri Supreme Court recently ruled unconstitutional. The St. Louis Post-Dispatch reported on Oct. 21 that motorists who paid the $100 tickets should receive full refunds in the coming weeks.

In early 2014, St. Louis City Circuit Judge Steven Ohmer struck down the city’s red-light camera ordinance as void and unenforceable because it conflicted with state law. However, Ohmer allowed the city to continue issuing red-light camera tickets while the ruling was being appealed, provided that revenue from the tickets was placed in escrow and refunded to motorists if his ruling ultimately was upheld, which the Supreme Court did on Aug. 18.

Refunds will be sent only to those ticketed from the date of Ohmer’s ruling on Feb. 11, 2014, and Aug. 19, 2015, which is the date the city stop issuing red-light camera tickets following the Supreme Court’s decision. Fines paid on tickets issued prior to Feb. 11, 2014, won’t be refunded.

Although many Missouri cities had operated automated traffic camera systems to ticket motorists alleged to have run red lights or committed speeding, most suspended enforcement in 2013 after the Missouri Court of Appeals issued a string of decisions striking down several cities’ camera ordinances. St. Louis is unique in that it continued to issue tickets after a judge ruled its ordinance invalid.

 

DESE TO LIMIT COLLECTION, RETENTION OF STUDENT INFO

The Missouri Department of Elementary and Secondary Education will stop collecting students’ Social Security numbers and remove unnecessary personal information already collected from existing databases by June 30. The action comes on a recommendation by the State Auditor’s Office following a cybersecurity audit conducted of DESE’s Missouri Student Information System.

The audit, which was released Oct. 21, found DESE unnecessarily collected and retained personally identifiable student information, including Social Security numbers, from Missouri school districts. DESE’s system includes records for about 900,000 current students and another 520,000 former students who have graduated since 2008. Overall, the audit gave MSIS a “good” rating, which is second-highest of the department’s four-tier rating system.

“When students’ Social Security numbers are exposed in a data breach, they are five times as likely to be a victim of identity theft,” State Auditor Nicole Galloway said in a news release. “We must take proactive measures to decrease the risk that personal information could be compromised. As a result of this audit, DESE has agreed to collect only the information that is absolutely necessary, destroy unneeded sensitive data from their system and maintain that information safely and securely.”