The plan to
completely overhaul the way Missouri funds higher education survived a committee vote Wednesday despite bipartisan misgivings about the impact on state colleges and universities.
And the House Budget Committee also backed Chairman Dirk Deaton’s proposal to
cut almost $52 million from child care payments and abandon plans to change how those payments are made.
The two issues dominated the first two hours of the committee’s work Wednesday to prepare the budget for debate before the full House. When the committee finished, at 11:30 p.m. after more than nine hours, Deaton, a Republican from Seneca, said the debate will occur soon after lawmakers return from their annual Spring Break next week.
With those two items, Deaton succeeded in protecting the biggest changes he made to the budget Gov. Mike Kehoe
proposed in January.
The 12 spending bills approved by the committee would provide $50.6 billion overall for state government operations in the year starting July 1, with $15.4 billion coming from general revenue. Kehoe’s budget proposed $52.1 billion in spending on state government operations, with $15.8 billion from general revenue.
One of Kehoe’s top priorities, increasing the appropriation for
MOScholars school vouchers from $50 million to $60 million, won approval despite Democratic opposition. Another Kehoe budget move, to cut $80.7 million in state and federal funding from services
for adults with developmental disabilities, was reversed by the committee.
The committee also cut $250,000 Kehoe requested for
The 57 Foundation, set up to “provide a facility to educate the public on the history of Gov. (Mike) Parson’s life and administration.”
Parson was Kehoe’s predecessor and the 57th governor.
Legislation to provide money for construction and major maintenance on state facilities, as well as continue projects already underway with state and federal funds, will receive attention after the operating budget passes the House, Deaton said.
The committee finished its work quicker than in recent years, and the House debate is set to occur two weeks earlier than last year.
“We’ve worked very hard to move as expeditiously as we can, while still doing our due diligence, but we feel good about where we’re at,” Deaton said in an interview with The Independent as the committee concluded its work.
Deaton is trying to cut as much as he can from general revenue spending to get state appropriations aligned with revenue. A
December estimate projected a decline of about $400 million in the current budget year, to $13.15 billion. Revenue is expected to increase to about $13.6 billion in the coming year.
So far, the decline has yet to materialize. Through Monday, revenues were up 1.4% for the year, which would produce $470 million in unanticipated revenue if it continues.
Deaton added about $180 million to the general revenue fund with his budget proposal. He took about $65 million from surplus money in the Blind Pension Fund to substitute for general revenue in the public school foundation formula. The spending plan also transfers $117.5 million from interest earned on money set aside for work on Interstates 44 and 70 to the general revenue fund.
A better revenue result than forecast would decrease deficit spending, but the gap between general revenue and spending remains, and it will require most of the remaining surplus accumulated in fiscal 2022 and 2023.
“It’s a responsible budget that does leave an unobligated balance,” Deaton said. “Any way you measure it, it is a responsible spending plan that is balanced.”
The ranking Democrat on the committee, state Rep. Betsy Fogle of Springfield, attempted to remove a restriction that bars families that have a child in a public pre-kindergarten program from participating in the Parents as Teachers program.
“I understand having to tighten our belt in tough, difficult, fiscal times, but there’s no reduction in costs, no decrease in the spend, but we are prohibiting families from accessing services that are really important,” Fogle said. “I am hopeful we will be able to strip that language.”
Higher education funding
Deaton, a Republican from Seneca, on Monday unveiled his plan for shifting about $250 million among four-year universities and $26 million among two-year community colleges. Missouri spends about $950 million on four-year universities and $180 million to support community colleges.
Kehoe’s plan for higher education was for the schools to receive the same state support as they are receiving in the current year. Deaton put all that money in a pool and redivided it based on the number of full-time equivalent students, with community colleges receiving about $3,650 for each and four-year universities receiving about $8,400.
The funding rearrangement would result in the state’s two historically Black universities — Lincoln University in Jefferson City and Harris Stowe State University in St. Louis — as well as Truman State University in Kirksville each losing 35% or more of their state funding. Others would receive large boosts, including Missouri State University in Springfield and Northwest Missouri State University in Maryville, which would each increase by about 26%.
While there was bipartisan agreement that the state’s support system for higher education is fundamentally flawed, there was no consensus for Deaton’s proposal.
“It is without question that we need to do something,” said state Rep. Raychel Proudie, a Ferguson Democrat who tried to revert funding to Kehoe’s original budget. “The way that we’re doing it now is absolutely archaic.”
A drastic cut in funding could force some schools to close, some members warned. Enrollment at Truman State is down more than 40% over a decade.
“Just the rumblings that a university can close will drive away a lot of students,” said state Rep. Greg Sharpe, a Republican from Ewing.
When Proudie’s amendment was defeated, Sharpe tried to limit the cut at Truman State to 10% but that, too, was defeated.
The biggest complaint about higher education funding is that there is no formula for deciding how to use available state dollars and current levels are a legacy of the political power of each school.
“If we pass this amendment that’s currently before us, then basically the status quo has won,” said state Rep. Bill Owen, a Springfield Republican. “ We’re going to just continue on like we have for over 80 years, and it’s just a piecemeal deal, depending on who’s in the chair, what they can get done for their university.”
The novelty of Deaton’s plan, coupled with the large funding swings it would cause, was a major source of objections.
“I have concerns about the speed and the pace at which we are moving on this,” said state Rep. Mike Steinmeyer, a Republican from Sugar Creek.
Deaton said his proposal would force colleges and universities to justify their state funding and push them to agree on a formula for future funding.
“It’s a hard conversation because now we are entrenched in this system that people have oriented around, that they’re relying on, and it’s hard, and it’s tough, and I get it,” Deaton said. “If we adopt (Proudie’s) amendment, it’s over. The conversation doesn’t continue.”
Child care
In his first State of the State address last year, Gov. Mike Kehoe promised to fix problems in the
state’s child care subsidy system by revamping the way providers are paid. Instead of receiving their payments after reporting attendance for a month, the state would make payments based on enrollment and send the money at the start of a month.
Payments based on enrollment are scheduled to start in May, but Deaton’s budget plan would require a return to payments based on attendance. He cut $51.5 million from the funding proposed by Kehoe by eliminating enhancement funds intended to bring subsidized care payments close to market rates.
State Rep. Betsy Fogle, a Springfield Democrat, said providers stressed by delayed payments in 2023 and 2024 have been counting on the changes promised by Kehoe to remain in business.
“I know we have child care providers who have left their doors open and remained in-network with child care subsidies because they were promised that these things were coming,” Fogle said. “They are sitting and waiting to see what we do on pay on enrollment, to decide whether or not they want to continue with childcare subsidy programs.”
Defending his changes, Deaton said moves to increase rates paid for subsidized care have brought more providers into the system. Paying providers based on enrollment is the current system and changes would make the entire program more expensive at a time when some parents are on a waiting list for assistance.
“I don’t think we’re walking away from any responsibility,” Deaton said.
Other budget issues
Democrats on the committee, outnumbered 21-10, attempted unsuccessfully to remove the appropriation for MOScholars. And Fogle tried, without success, to impose limits on the type of schools that can accept students using the tuition vouchers.
Her amendment would have required all schools taking MOScholars vouchers to accept applicants “regardless of race, sex, ethnicity, religion or learning ability.”
“My desire here is to make sure that public tax dollars go to schools that have the pleasure and privilege of serving all children, regardless of background,” Fogle said.
Republican opposition to the amendment was swift.
“In saying that we can’t discriminate on the basis of religion, it seems to me you’re discriminating against religious schools, and doing so for their being religious,” Deaton said.
But not all Republicans opposed Fogle’s attempt to deny tax dollars to schools that require religious affiliation to attend.
“Some of what she’s touching on, I think, has some merit,” said Sharpe.
He said it should be in the statute governing MOScholars.
“There are some discrepancies and there’s some hypocrisy that we have allowed to happen that probably could be, and should be, addressed,” Sharpe said.
Some of the money Kehoe wanted to give to The 57 Foundation will instead go to a anti-abortion pregnancy resource center in Cape Girardeau. The rest will go back to the general revenue fund.
Kehoe tapped federal funds in the Temporary Assistance for Needy Families program for $125,000 for Parson’s foundation and matched it with $125,000 of general revenue.
State Rep. John Voss, a Republican from Cape Girardeau, offered the amendment to cut the funding. The $125,000 from TANF funds went to the pregnancy resource center in his hometown, along with another $250,000 to reverse a cut made by Deaton as he prepared his version of the budget.
“I am returning the $125,000 of general revenue to the bottom line,” Voss said.
Voss wasn’t the only member looking to cut the appropriation. When Fogle said she had hoped to find a place for it, Deaton said he will try to accommodate her.
“It is a small enough amount,” he said. “Maybe we can figure out how to do that.”
