JEFFERSON CITY • The showdown between Gov. Jay Nixon, a Democrat, and the Republican-led Legislature reached a new level Tuesday when Nixon announced he will withhold education funding unless his vetoes of 10 tax break bills are sustained.
Nixon cut about $1.1 billion from the state budget, citing the tax break bills and the Legislature’s failure to pass Medicaid expansion and tax amnesty.
The Legislature’s $26.4 billion budget for the 2015 fiscal year, which begins July 1, included a $100 million general revenue increase for the Foundation Formula, which funds K-12 public schools, and a $43 million increase for higher education institutions based on performance. Nixon is withholding both unless the Legislature sustains his vetoes.
The Legislature can override vetoes during a September session, but a two-thirds majority in each chamber is required.
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The 10 bills provide tax breaks to grocery stores, power companies and dry cleaners, to name a few, which Nixon estimates would drop state revenue by $425 million.
Sen. Ryan Silvey, R-Kansas City, sounded off on Twitter about Nixon’s decision.
“First, Gov. Nixon vetoes the school transfer bill, now he uses school funding as a hostage ... again,” Silvey said. “Can we quit pretending he cares about kids?”
Funding for a new facility at the aging Fulton State Hospital remains in the budget, as does funding to eliminate the Medicaid in-home wait list for developmentally disabled people in every county participating in the Partnership for Hope.
House Speaker Tim Jones, R-Eureka, said in a statement that Nixon’s actions are hypocritical.
“This is a governor who tells the public he wants to invest in our young people, but then is all too willing to make school funding his first target and show that public education is his lowest priority when he does not get his way,” Jones said.
The battle is just the most recent fought between the governor and the Legislature over money.
First, they disagreed over how much revenue would grow in the fiscal year beginning July 1. Nixon estimates state revenue will grow 5.2 percent for fiscal year 2015. The Legislature, however, anticipates a lower figure: 4.2 percent.
In response to the difference, House Budget Committee Chairman Rep. Rick Stream, R-Kirkwood, created a surplus revenue fund, where money would be funneled should revenue increase more than the Legislature anticipates.
However, the Legislature’s more conservative estimate appears to be underscored by the anemic revenue growth Missouri is experiencing as the current fiscal year comes to a close. The Legislature expected 2 percent revenue growth by the end of fiscal year 2014. But revenue is flat as of now, Stream said.
Next, they fought over a $620 million income tax cut, which will begin in 2017 if state revenue targets are met. The Legislature overrode Nixon’s veto of the measure during the session.
Then came a battle over the 10 tax break bills that Nixon vetoed. And now the governor is fighting back with his cuts, which are termed “withholds,” using them to warn the Legislature against overriding his vetoes of those bills.
Some increases being withheld by Nixon include:
• $15 million for K-12 transportation.
• $3.1 million of the $4.1 million for the Missouri Preschool Program in provisionally accredited and unaccredited schools.
• $12 million of the $15 million for the needs-based scholarship, Access Missouri.
• $4.3 million of the $8.5 million for tourism.
• $5 million for Kansas City to host the Republican National Convention.
Funding to add general dental coverage and occupational, speech and physical therapy benefits for Medicaid eligible adults also were withheld.
Additionally, Nixon withheld funding many capital improvement projects passed by the Legislature, including the Cortex Innovation Community projects, which consist of a business incubator and a MetroLink station.
Nixon also announced he will cut 260 jobs, withhold a 1 percent pay raise for state workers and close a total of 19 regional offices spread among the Department of Revenue — including one in Ƶ — the Department of Natural Resources and the Department of Mental Health.
The governor’s $144.6 million worth of general revenue vetoes include:
• $2.5 million of the $3.5 million increase for new reading instruction programs in unaccredited and provisionally accredited districts. He left $1 million for Normandy untouched.
• $1 million increase for Teach for America.
• $200,000 for an economic development office in Israel.
“These actions are not easy, but they are absolutely essential to putting the budget back in balance and keeping the state on a fiscally responsible path,” Nixon said.