Missouri state budget (2008-2009)
- 1 Impact of budget woes
- 2 Budget background
- 3 Ideas about why the crisis occurred
- 4 Proposed actions
- 5 Budget transparency
- 6 See also
- 7 External links
- 8 Additional reading
- 9 References
Missouri faced an estimated $261 million deficit for the fiscal year ending June 30, 2009, as of January 2009. The deficit was previously estimated at $342 million. The state was operating on a $22.4 billion budget for FY 2009 and in January 2009 officials estimated that tax revenues would come in $542 million below budgeted expectations.
In Gov. Jay Nixon's state of the state address he proposed cuts of 1,300 state jobs and the expansion of state health coverage. Nixon noted that his budget for FY 2010 and cuts made to FY 2009 did one fundamental thing -- it "invest[ed] in people." However, in March the amended budget proposal eliminated the governor's expansion of state health care coverage and the $82 million plan to expand health-care coverage for children. Approximately $300 million in federal stimulus funds were used to balance the budget. According to state officials, in early 2009 219,000 people were unemployed, 42,000 had their homes foreclosed upon in 2008 and 729,000 lacked health insurance.
"The national economic meltdown is creating serious challenges for Missouri families," said Nixon of the state's economic status. "Jobs are being lost. Homes are being foreclosed. Retirements are being delayed. And everyone is concerned about what the future will bring."
Impact of budget woes
- See also: State budget issues, 2009-2010
- In January 2009 the unemployment rate reached 8 percent, compared to the national rate of 7.6 percent. According to the Missouri Department of Economic Development, the largest decreases occurred in construction, with 5,800 jobs lost; manufacturing, 4,100 jobs lost; and private educational services, 2,800 jobs lost. In January the number of payroll jobs dropped by 11,500. In December 2008 the state unemployment rate was 7.1 percent.
- On February 25, 2009 legislators moved to borrow $15 million from the U.S. government to replenish the state's depleted unemployment trust fund. According to the state Department of Labor and Industrial Relations, the state started the year with a balance of $114 million, which had since dropped to $9 million. Lawmakers anticipated borrowing $70 million in February, up to $120 million in March, and up to an additional $70 million in April.
- In February 2009 the governor amended his budget proposal to increase the appropriation for the University of Missouri and Lincoln University extension programs by more than $10.1 million. Initially both schools had been cut by approximately $15.4 million. The larger appropriation was possible because state administration identified surplus funds remaining after the construction of the new women's correctional facility at Chillicothe.
- See also: Missouri state budget
Missouri's fiscal year begins July 1 and ends June 30 of the following year. In October state department agencies prepare budget requests and revenue estimates for the upcoming budget year. By the end of December the governor reviews both the requests and the revenue estimates prior to presenting a budget recommendation to the legislature. Both the House and the Senate review the bill, hold a series of hearings and make any necessary amendments prior to approving the budget. The Senate usually finishes its work on budget about three weeks before the legislature adjourns at the end of April. All appropriations bills must be passed by the General Assembly one week before the session ends. The appropriations are then forwarded to the governor, who has line item veto power and can reduce or eliminate any amount of funding for any item in a bill before signing it into law.
- FY 2008 ended with general revenue collections growth of 3.7 percent above the revised consensus revenue estimate of 3.1 percent.
The following table provides a history of Missouri's expenditures and gross domestic product (GDP).
|Fiscal year||Expenditures (billions)||GDP (billions)|
- NOTE: The figures for FY 2009 had not been finalized at the time this data was compiled.
Ideas about why the crisis occurred
- General revenue collections declined 1.4 percent compared to 2008, from $4.9 billion in 2008 to $4.83 billion in 2009. General revenue collections for February 2009 decreased by 10.5 percent compared to those for February 2008, from $438.9 million to $393.1 million.
- In February 2009 sales and use taxes decreased by 6.5 percent for 2009, from $1.36 billion in 2008 to $1.27 billion in 2009. Individual income tax collections increased 3 percent for the year, from $3.60 billion in 2008 to $3.71 billion in 2009. Corporate income and corporate franchise tax collections decreased 7 percent for the year, from $316.2 million in 2008 to $294.7 million 2009.
- Statewide, casino revenues for February 2009 were up $5.1 million over February 2008. For the fiscal year that started July 1, 2008 revenues were $63.9 million higher than in the same span of the previous fiscal year. Overall, winnings at four of Missouri's five largest casinos dropped from January to February in 2009. Officials attributed the lower winnings to February being a shorter month with one less weekend than January.
Governor Jay Nixon
Gov. Nixon took office in January 2009, but in December the governor announced he would direct each department and agency to submit proposals to reduce its expenditures, freeze all of the state’s long-term contracts, require status reports on all capital projects, conduct performance reviews of each agency and instruct the Department of Economic Development to submit reports on all state tax credits to determine whether they had led to new jobs. “The national economic climate has had a devastating impact on Missouri’s economy, and together, we must take bold action to make government smaller, more efficient and more responsive,” Nixon said. In January 2009 Nixon signed three executive orders. He created the Missouri Automotive Jobs Task Force, a 15-member Governor’s Economic Stimulus Coordination Council and directed the Missouri Department of Economic Development to work with the Missouri Development Finance Board to create a pool of funds designated for low-interest and no-interest direct loans for small businesses.
In the governor's state of the state address he proposed to increase Medicaid eligibility to 50 percent of the poverty level at a cost of $143 million in FY 2010's budget. However, in March 2009 the House removed the proposal from the budget draft.
Lt. Gov. Peter Kinder and Republican legislative leaders wanted Missouri to reject millions in federal stimulus dollars for increased unemployment insurance. According to the American Recovery and Reinvestment Plan, Missouri would be required to change its unemployment laws to extend normal jobless benefit periods and include workers not currently covered, including temporary workers, in order to receive millions in stimulus funds. "This is essentially a federal bribe to change state laws permanently and the bribe lasts two years, or less," said Kinder. Republican lawmakers said they feared that businesses would be required to pick up the tab for increased unemployment insurance taxes once the federal stimulus money ran out in two years. Dan Mehan, president and CEO of the Missouri Chamber of Commerce and Industry, said his organization supported rejecting the stimulus money because it could amount to a tax increase on businesses. According to preliminary reports of the Republican FY 2010 budget bill, the bill was $260 million less than originally recommended by the governor. The budget used more federal stimulus than Nixon's, nearly $200 million more. The budget for K-12 education relied heavily on federal stimulus dollars, using more than $900 million in stimulus money while cutting $526 million from the general revenue appropriation for schools.
Lawmakers passed a bill prohibiting lawmakers from increasing spending by more than the annual rise in inflation plus population growth. However, Democratic legislators said that the spending restrictions would too tightly bind the decisions of future lawmakers. Rep. Jason Kander said that the bill showed nothing more than a lack of faith in government. For the FY 2010 budget Governor Nixon proposed increasing Medicaid eligibility to 50 percent of the poverty level, at a cost of $143 million, and expanding health-care coverage for children. However, in March House Republicans cut the program from the draft and additionally reduced the budget by approximately $200 million. The cuts, said Rep. Chris Kelly, were "profound." In regards to the cuts made to the governor's proposed programs, legislators said it would not have cost the state general revenue fund a dime. The federal government would pick up nearly $92 million of the cost, and hospitals in the state had pledged to pick up the rest, including $14 million that typically would be the state's responsibility. "They regard all this simply as 'welfare,'" Kelly said. "They see this as an opportunity to cut 'welfare' without any thought to the actual cost to society."
Economic stimulus package
Missouri was expected to receive $4 billion of the $787 billion dollar economic stimulus package. According to White House officials, the package was expected to create approximately 69,000 jobs.
According to preliminary reports, Missouri was expected to receive:
- $40.3 million to fund law enforcement
- $1.2 billion for Medicaid
- $753 million for overall education expenses including building renovations
- $168 million for public safety, state run colleges and renovation of public school or college facilities
- $600 million for the Department of Transportation
- $400 million for food stamps
- $225 million for special education
- $145 million for Title I Education for the Disadvantaged
- $140 million increase for recipients of Missouri Pell Grants
- $125 million for weatherization
Missouri Accountability Portal is the name of the publicly available website created by the Missouri government. It discloses information about Missouri government's spending, and includes data on state employee salaries, agency expenditures, and tax credit information. The Missouri Accountability Portal was created at the Executive Order of Governor Matt Blunt in July 2007.
The National Taxpayers Union pulled expenditure information from the Missouri Accountability Portal (MAP) and issued a press release in August 2008 detailing the discovery of more than $2.4 million of taxpayer money spent for questionable purposes over the past eight years, including purchases made at bakeries, beauty salons, lingerie stores, coffee shops and picture-framing galleries, among others.
The state of Missouri spent $15,482.57 at Ann's Bra Shop from 2000 to 2008 for "professional services" and "clothing supplies." Over the same period, government employees spent more than $1.6 million at coffee shops, $387,210.14 at framing stores, $278,053.46 at florists and nurseries, and $70,849.02 at donut bakeries.
Other dubious expenditures found by NTU included $936.75 spent at The Corsage Shop, $232.00 at Doris' Beauty Shop, $1,651.27 at The Jean Shop, $348.70 at the Budget Rose Shop, $6,964.55 at Susie's Bake Shoppe, and $3,803.00 at the Westside Barber Shop. In 2000, $12.00 was spent at Ann's Hair & Nail Shop for "other professional services."
Governor Blunt responded by asking the state’s Office of Administration to review the expenditures, which found that the Ann's Bra Shop purchases were legitimate Department of Corrections expenses for special-needs products for female inmates in Missouri’s prison system. Said Governor Blunt in a statement, "This was exactly what we expected and envisioned when we created the MAP site. Transparency and openness help root out wasteful spending and we welcome this scrutiny.”
Missouri Accountability Portal provides a database of state financial information, which is searchable by criteria such as expenditures, vendors, contracts, and employee names. The following table is helpful in evaluating the level of transparency provided by Missouri Accountability Portal:
|State database||Searchability||Grants||Contracts||Line item expenditures||Dept./agency budgets||Public employee salary|
|Missouri Accountability Portal|
Limitations and suggestions
Ed Martin speaks about Missouri's online spending portal
National Taxpayers Union noted that, "Unfortunately, MAP only goes so far in telling you what was actually behind the expenditures. Often, the spending record data would dead-end at 'professional services,' 'supplies,' or 'non-contract purchases.' While it's possible that some of these purchases were fairly innocuous, the name of the vendor alone gives reason for taxpayers to at least question the expense. The next step for MAP should be posting line-item information from purchase receipts on the spending portal. Taxpayers need to see exactly how those funds were spent."
Support for creation of the database
This website was created by an executive order from Governor Matt Blunt.
Public employee salary information
- See also: Missouri state government salary
The Missouri Accountability Portal provides information about state employee pay. Users can view pay information about the employees of the state by their agency of employment, position title or employee name. The database provides gross pay amounts by the last pay cycle and year-to-date.
Economic stimulus transparency
- The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the nation. Of that $787 billion stimulus package, it was estimated that 69%, or over $541 billion, would be administered by state governments.
- Missouri was expected to receive an estimated $2,889,357,187.
- Show-Me Institute
- Americans for Prosperity, Missouri
- Missouri Accountability Portal, official website
- Office of Administration, Missouri government
- Missouri state budget, fiscal year 2009
- Missouri government spending
- Model transparency legislation from the American Legislative Exchange Council is available at this link.
- Center on Budget and Policy Priorities,"State budget troubles worsen," March 13,2009
- Associated Press,"Projected Missouri budget shortfall smaller than expected," January 22,2009
- State of Missouri,"Governor Nixon's budget message," January 27,2009
- Missourian,"UPDATE: $22.8 billion state budget passes House committee after 14-hour session," March 12,2009
- Associated Press,"Gov. Nixon: cut state jobs, expand state health care coverage," January 27,2009
- Columbia Daily Tribune,"Missouri's unemployment rate climbs to 8 percent," February 28,2009
- St. Louis Business Journal,"Mo. to borrow money for unemployment fund," February 25,2009
- State of Missouri,"Gov. Nixon identifies surplus state funds; recommends reallocation to university extension programs," February 11,2009
- St. Louis Childrens,"Missouri Budget Process," accessed March 17,2009
- Division of Budget & Planning,"Summary of budget highlights and major changes to instructions," July 14,2008
- US Government Spending,"Missouri State and Local spending," accessed March 16,2009
- Springfield Business Journal,"Missouri general revenue dips 1.4% in February," March 6,2009
- St. Louis Business Journal,"Mo. revenue collections down," March 4,2009
- Associated Press,"Revenues and patrons up at Missouri casinos," March 11,2009
- State of Missouri,"Missouri's Historic Economic Challenges: Gov.-elect Nixon Announces Initial Steps to Address Budget Shortfall," December 3,2009
- State of Missouri,"Gov. Nixon signs executive orders to help put Missouri economy on the right track," January 13,2009
- Prime Buzz,"Missouri budget bills available: big cuts to Nixon priorities, deep cuts to existing programs, much of stimulus unspent," March 6,2009
- Governor Nixon,"Fiscal Year 2010 Missouri Budget and Legislative Priorities," accessed March 17,2009
- News-Leader,"GOP advocates rejecting unemployment aid," February 26,2009
- Associated Press,"Missouri House approves spending limits measure," March 12,2009
- Associated Press,"Mo. lawmakers approve accounts for stimulus funds," March 10,2009
- American Recovery and Reinvestment Act,"Estimated job effect," accessed March 17,2009
- Missourinet,"Nixon administration details stimulus impact on Missouri," February 23,2009
- St. Louis Business Journal,"Mo.,Ill. get stimulus for law enforcement," March 9,2009
- St. Louis Business Journal, "Group: $2M of Mo. taxpayer money spent on ‘questionable purposes’," August 29, 2008
- National Taxpayers Union,"Missouri Tax Dollars Spent at Beauty Salons, Bra Shops, and Donut Bakeries, Review Finds," August 29, 2008
- National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
- Wall Street Journal,"Stimulus Spending by State," March 12,2009