The Joplin Globe, Joplin, MO

Business

July 11, 2013

Missouri disasters cost $36M; far less than expected

JEFFERSON CITY, Mo. — Confronted by a spate of natural disasters, Missouri Gov. Jay Nixon cut funding for education and stockpiled tax revenues two years ago while committing $150 million to respond to the deadly Joplin tornado and widespread flooding.

As it turns out, most of that money never was spent — nor needed — for disaster aid.

Missouri’s final tab from a disastrous 2011 totaled a little over $36 million, according to figures compiled for The Associated Press by the state’s budget chief. That’s merely a quarter of the amount Nixon had committed.

The rest of the money — about $114 million — went to other government purposes, though exactly what it was used for is not clear.   

“It would have gone into the big budget picture,” said Linda Luebbering, the director of Nixon’s Division of Budget and Planning.

There was no dollar-for-dollar accounting of the leftover disaster money. The cuts to colleges never specifically were restored. The money simply got absorbed into the pool of general revenues spent on government operations and services during 2012 and 2013, Luebbering said.

That revelation provided an “I-told-you-so” moment for some lawmakers.

“To me, it was an overreach on his part — nothing illegal or unethical about it — (but) we thought at the time that the numbers were too high, and it turned out that they are,” said House Budget Committee Chairman Rick Stream, a Republican from the St. Louis suburb of Kirkwood.

A Nixon spokesman declined to comment, but Luebbering said even with the benefit of hindsight, the administration wouldn’t have done anything differently. She said the state’s costs were lower than expected, in part, because insurers and the federal government paid more than initially anticipated.

But Senate Appropriations Committee Chairman Kurt Schaefer said Nixon’s $150 million set-aside was “absurd” and a prime example of the Democratic governor’s “budget manipulation practices” that have allowed him to redirect money as he wishes.

“There simply was no objective evidence that there was any reasonable basis to withhold that money,” said Schaefer, a Republican from Columbia, the home of the University of Missouri.

The governor was quick to act when disasters struck. In May 2011, he pledged $25 million to help recover from flooding in southern Missouri. Later that month, a tornado killed 161 people and injured hundreds of others in Joplin. Nixon raised his disaster-aid pledge to $50 million while cutting a roughly equal amount of general revenues from education and other state services out of the upcoming budget.

When that new budget began on July 1, 2011, Nixon again raised the state’s disaster-aid commitment to $150 million while citing growth in state revenues. At the time, cleanup was ongoing in Joplin and the federal government had declared another disaster because of flooding on the Missouri River.

“At that time, we were just trying to be conservative and make sure that we were prepared to cover it,” Luebbering said. “We didn’t scientifically come up with the number.”

For the Joplin tornado alone, insurers reported losses of over $2 billion, according to the state insurance department, which quit collecting data on the nearly 20,000 insurance claims last October. That’s at the upper end of the $1.5 billion to $2 billion of claims that the state insurance department had predicted in July 2011.

The federal government’s share of the costs from the 2011 tornadoes and flooding stands at $250 million, compared with $36.4 million for the state and $27.6 million for local entities, according to figures from Nixon’s budget office.

Of the state’s share, just $7.6 million has been paid so far.

Since the disasters, Missouri’s finances have improved. The state began a new budget this month with a surplus. Yet the public colleges and universities that lost money in 2011 because of the anticipated disaster costs never specifically had that money restored.

After Nixon’s disaster-related budget shuffling in 2011, lawmakers changed the way they write the budget to reduce the governor’s flexibility to increase spending or shift money among certain programs.

Stream said he hopes state officials have learned an important budgeting lesson. When disasters strike, officials should realize that the bills won’t come in immediately and should place any set-aside money in a special account that can be tracked and budgeted as needed, he said.

“Then it can be used for purposes the Legislature wants to use it for, not the governor’s desires or whims,” he said.

 

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