The Joplin Globe, Joplin, MO

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June 28, 2013

Missouri governor lays out cuts in proposed spending as part of tax cut debate

JEFFERSON CITY, Mo. — Missouri Southern State University and Crowder College could both take a hit if $400 million in proposed budget cuts go forward. The cuts were outlined Friday by Missouri Gov. Jay Nixon.

The Democratic governor made his announcement three days before the state’s $24 billion fiscal year 2014 budget goes into effect on Monday.

Nixon said his administration also is prepared to withhold a pay increase lawmakers passed for state workers and he directed his budget chief to prepare a plan to eliminate 1,000 state positions if legislators override his veto of an income tax bill that he contends would drain state revenue.

Earlier this month, Nixon vetoed a Republican-backed bill that would have phased in a package of tax deductions for businesses over the next five years and would have gradually reduced the income tax rate for individuals and corporations over the next decade.

A veto override session is set for September.

Legislative projections presume the bill would reduce state revenues by more than $700 million annually when fully implemented. But the immediate cost would be smaller and each incremental tax rate reduction for individuals and corporations would take effect only if state revenues continue to rise by $100 million annually.

Nixon, who believes the annual cost would be higher and could hit as much as $1.2 billion, said the income tax cut “would undermine our fiscal foundation now and for years to come.”

Education

Nixon’s move includes a 4 percent cut for higher education. For the Joplin area, that would mean more than $900,000 would be cut from the MSSU appropriation and $177,941 from the Crowder appropriation lawmakers approved in their budget.

With the 4 percent cut, MSSU will receive $22,320,949 from the state — nearly $600,000 less than it received from the state last year. For Crowder, the state will have $4,375,706 available — $66,643 less than it received last year.

Alan Marble, the outgoing president of Crowder who takes over as interim president of Southern on Monday, was taking a wait-and-see approach.

“It would be too soon to try to figure out what might be done with a potential withholding,” he said, noting that universities and colleges in the state have gone through this before.

“We hope that doesn’t happen, but it may. We will make contingency plans as appropriate.”

Nixon said Friday that elementary and secondary schools would receive level funding, after announcing a $65 million withholding of additional money that had been included in the budget.

Nixon’s actions received an instant endorsement as “prudent and necessary” from the Missouri School Boards’ Association, which is part of a coalition urging lawmakers to sustain the veto of the tax cut.

Ronald Lankford, deputy commissioner at the Missouri Department of Elementary and Secondary Education and former superintendent of the Webb City School District, said he “would be surprised” if K-12 schools were to make budget shifts ahead of September.

HB 253

Lawmakers would need a two-thirds majority vote in both chambers to override Nixon’s veto. House Bill 253 — the tax bill at question — passed the General Assembly this spring with support from 103 state representatives, six fewer than required to override a gubernatorial veto.

House Speaker Tim Jones, R-Eureka, has indicated he will seek an override. Republicans proposed the income tax cut as an attempt to combat the so-called “border war” between Kansas and Missouri, with legislators from each state competing for businesses.

Senate Appropriations Committee Chairman Kurt Schaefer accused Nixon of “playing politics with taxpayer money.”

“He’s using it as leverage to basically further his opposition to giving Missouri taxpayers back any of their money,” said Schaefer, R-Columbia.

State Rep. Charlie Davis, R-Joplin, agrees.

“This is a political move on his part,” Davis said. “This threat when we have not implemented any part of the tax cut is ludicrous.”

Davis said that the $1.2 billion figure Nixon’s administration has touted is dependent on several factors, and said the $400 million Nixon has threatened to cut this year is unnecessary because revenue has not yet dropped even a penny because of the proposed tax cut.

State Rep. Tom Flanigan, R-Carthage, vice chairman of the House Budget Committee, said he is disappointed the governor would withhold funding for education and health services based on the assumption the tax cut bill would be overridden by lawmakers.

Flanigan said Nixon is “holding hostage school children and the developmentally disabled,” adding “there will be people impacted immediately by withholding these funds.”

The Associated Press contributed to this report.

 

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