Legislation Update

2017 Budget Cuts

July 6, 2016

JEFFERSON CITY, Mo. Just three business days into FY 2017, Gov. Jay Nixon says the state isn't making enough money to support the budget passed by the General Assembly.

"In order to protect our shared priorities like public education, college affordability and mental health, a number of new and expanded programs will have to be pared back or put on hold," Nixon said. "These modest restrictions are being applied to new programs or increased spending for existing programs, so as to minimize the impact on the priorities we share: investing in our local schools, holding down college tuition, and helping Missourians with mental illnesses and developmental disabilities live more full and independent lives."

Clicking this link will take you to the list of FY 2017 Budget Withholds

Nixon said the restrictions were necessary due to lower than projected revenue growth. He blamed that on a 35 percent drop in net corporate income taxes in FY 2016. However, the state's budget documents show that while corporate and franchise income tax revenues fell about $90 million, personal income and sales and use tax collections rose more than $300 million. Overall, collections in 2016 were up 2.62 percent.

The announcement follows suspicions from some lawmakers that the automatic income tax wasn't triggered because Nixon ordered the Department of Revenue to issue tax refunds by the end of June, depressing revenues.

Nixon also said there could be more cuts if the legislature overrides his vetoes of three tax breaks, which would reduce revenue by more than $60 million. The legislature meets for the veto session in September. This isn't the first year Nixon has withheld money from the budget. He typically does it at the beginning of the fiscal year then as revenues bring in more money, he restores the funding.

Rep. Kurt Bahr, R-St. Charles, chair of the Elementary and Secondary Education Appropriations Committee expressed his disappointment at the cuts to increases to some education programs, like a reduction of $1 million that would have funded a teacher pay raise that was cut to $300,000. "Missouri teachers are the lowest paid nationwide, and we had an opportunity to change that this year," he said. "As the Chair of the Elementary and Secondary Education Appropriations Committee, I understand firsthand how an inappropriate lack of funding can cripple our education system. I am disappointed by the Governors lack of support for programs that work to support both our students and teachers."

The restrictions were limited to new programs and programs expected to see an increase in budget. Among the items affected was the University of Missouri System Review Commission, which lost all $750,000 allocated to it. The commission will continue to meet and investigate without state funding and Sen. Kurt Schaefer responded to Nixon's restriction on that funding Thursday afternoon.

"The money to fund the Commission was taken from the University's budget, it was not an increase," he said. "I believe the Commission has important work to do in order to hold the university accountable to taxpayers through the General Assembly, and I hope they will continue their work."

The state legislature recently gained the ability to review the governor's budget withholdings. They didn't use the tool during the 2016 session and any review in 2017 would come after the term-limited Nixon has left office. Nixon's action was immediately met with derision on Twitter, where some bemoaned the loss of hard-fought for funding and others complained that Nixon was cutting legislative priorities.

Click to see current 2016 Missouri House of Representative bills indexed by subject

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