The following is preliminary legislative analysis from the
Missouri Budget Project E-News
General Assembly Passes Budget
After several long days of negotiations and discussion, state lawmakers gave final approval to the Fiscal Year 2016 State Operating Budget on Thursday. The budget provides approximately $26 billion in funding for core services including education, health, mental health, and children’s services. About one-third of the total amount comes from state general revenue. The budget bills now move to the Governor’s desk a full two weeks ahead of the constitutionally-mandated budget deadline.
As you know, significant cuts that had been included in the Senate version of the budget led to disagreement between the House and Senate. The Senate had subjected large portions of the budgets for Health & Senior Services, Mental Health & Social Services to a “lump sum” budget and applied reductions to the amount of funding available for the services that were included in the “lump-sum.” The House steadfastly rejected the “lump-sum” approach and members of the Senate leadership quickly followed suit, with Senators Dempsey and Richard voicing their objections by the end of last week. These disagreements, and others, resulted in delaying the budget conference committee meetings for nearly a week to allow for time to reach compromises.
The final version of the budget moves much closer to the original House version of the budget, although two significant aspects of the Senate version of the budget were approved, including:
• A $40 million general revenue reduction to select services in the Department of Social Services budget. While this reduction is considerably smaller than what the Senate had originally approved, it will still result in reductions to specific services; and
• Expansion of Managed Care specifically for parents and children who receive health care through Missouri’s Medicaid program. However, the transition will occur slowly and only after the plan has been reviewed.
The state general revenue funding provided for the Education, Health & Senior Services, Mental Health and Social Services in the approved FY 2016 budget is summarized in the following table. Following the table is brief summary of some of the major decision items included in the budget. MBP will be providing a more comprehensive analysis in the coming weeks as detailed data becomes available.
The budget now moves to the Governor’s desk. He has 15 days to sign or veto the budget bills.
Sources for all data: Missouri Senate Appropriations Committee – 2014 Annual Fiscal Report – Fiscal Year 2015; Missouri Senate Appropriations Staff FY 2016 Budget Tracking Sheets as of April 10, 2015; House Bills 2, 3, 10 & 11 -Truly Agreed Version and Missouri Office of Administration – Division of Budget and Planning
K-12 & Higher Education:
• State funding for local schools through the “Foundation Formula” was increased by $84 million compared to the current year.
• Funding for Parents-As Teachers early intervention program was increased by $2.462 compared to the current year.
• Higher education received a $12 million increase for “performance” funding for Missouri’s public colleges and an additional $5.5 million in equity funding for community colleges compared to the current year.
• However, the Bright Flight scholarship funding was reduced by $4 million and the Access Missouri Scholarship funding was reduced by $9 million.
Health, Mental Health, Children’s Services and Social Services:
• Provider rates were increased by 3% for all Department of Mental Health providers, Home and Community Based service providers in the Department of Health budget, Children’s services, Child Care providers and MO HealthNet providers in the Department of Social Services budget.
• $3.5 million in general revenue and $13.672 million in total funding was provided to establish the Show Me Healthy Babies program.
• $14.9 million was included to fund Dental Services for Medicaid adults who do not currently receive them.
• The budget included language that would allow Missouri to increase eligibility for child care assistance. Missouri currently provides a full benefit to families with incomes up to 123% of the federal poverty level and a partial benefit to families with incomes to 175% of the federal poverty level. The budget language would increase Missouri’s eligibility for the full benefit to 138% of the federal poverty and for the partial benefit to 215% of the federal poverty level. However, it’s not clear if the budget actually includes sufficient funding for these eligibility increases. The current budget provides approximately $165 million for child care assistance; the FY 2016 budget includes $172 million. The increase of $7 million dollars is significant, but may fall short of the funding needed to expand eligibility to the extent described.
TABOR Advances in Senate
A proposal that would force permanent cuts to K-12 education, higher education, public safety and corrections, health care and other key services that support Missouri’s economy and quality of life has reached the Senate calendar. The proposal, called TABOR after a similar ill-fated measure in Colorado, would impose a rigid formula intended to limit growth in state spending, and is flawed in many ways.
House Joint Resolution 34 would place language on the November 2016 ballot that would limit the growth of state General Revenue appropriations from year to year to no greater than the annual rate of inflation plus population change in the state.
• Missouri revenue is already limited by the Hancock Amendment, and revenues in 2013 were already $3.5 billion under that limit. In fact, relative to personal income, state general revenue is at near record lows. As a result of low revenues, exacerbated by the most recent economic recession, Missouri has cut many services over the years, which it has yet to restore.
• Moreover, the growth limit based on inflation plus population is flawed because state services grow at different rates than consumer goods and services do, which is what inflation measures. For example, services needs that respond to changing population demographics, such as increases in the senior population or increases in the number of kids who require special education, are not reflected in the consumer price index of inflation.
The bill is currently in the Senate Governmental Accountability and Fiscal Oversight Committee, but has been placed on the Senate calendar.
From the Missouri Budget Project