As headline after headline in the news is dominated with stories on government’s excessive spending and its rising deficits, I, like many across Missouri am concerned with Missouri’s long-term financial well being. The question becomes, do we want to make the decisions now to fix the problem or ignore it and be destroyed by it in the future.
I believe our current budget situation has developed in large part because the politicians in Jefferson City have forgotten that they won an election to lead today by making decisions but instead have chose to focus on their next election by catering to special interests and campaign contributors. The past few years gave plenty of warning that it was time for the state to live within its means. In 2009, Missouri saw a revenue decline of -6.9% ($585 million) followed with another revenue decline in 2010 of -9.1% ($676 million). And through May 2011 state revenue has grown only 2.6%. The problem with this growth is that when spending your money, the General Assembly spent expecting 3.6% growth or $70 million more than they really had.
As revenues have dropped, the politicians have failed to lead and make the decisions to balance Missouri’s budget, instead, opting to push the looming budget deficit off to the future. The past two years the General Assembly has passed budgets built on hundreds of millions of one-time federal stabilization and stimulus dollars, which are now gone. And while maintaining inflated state spending levels using one-time federal bailout dollars, the state still spent more than it had because revenues decreased below estimates. By spending more money than it had, the budget has been out of balance forcing Governor Nixon to withhold dollars from vital state programs, specifically from education.
So, even though history gave politicians a clear indication of what was to come, the General Assembly again this year decided to put off decision making. This year, the General Assembly passed a $23.2 billion budget which includes $400 million in one-time federal stabilization funds. The budget also assumes that state revenues will grow at 4% next year, which is $70 million more than Missouri’s revenues have historically grown. If Missouri does not exceed its historical pattern of growth, the Governor will at the very least have to withhold or veto $154 million just to balance the out of balance budget politicians gave him.
The out of balance budget became real two weeks ago when Governor Nixon was forced to withhold and veto $57 million from what the General Assembly appropriated. Unfortunately, because the General Assembly failed to address Missouri’s budget shortfalls this year, the Governor chose to balance the budget through cuts and withholds to education. Because politicians failed to act, Missouri students will face steeper tuition and fees for higher education. K-12 schools, which are already facing budget short falls because politicians did not fully fund the foundation formula, also will now have to cut classroom dollars to transport students to and from school.
Cuts to Education
Missouri’s day of reckoning will come when the General Assembly works to pass next year’s budget. This year’s budget used $155 million from last year to spend in this year and will not be available next year. And based on recent history, Senate Appropriations expects mandatory expenses to increase approximately $200 million for the next year’s budget. These factors combine to create a forecasted budget gap next year of approximately $755 million.
Liberals in the state and even some Republicans believe we have a “revenue crisis” and as Representative Mary Still (D-Columbia) laid out in a recent op-ed in the Columbia Tribune, their solution is to raise cigarette, internet sales, business, and personal taxes. Calling for tax increases is wrong. The problem is not that Missouri’s politicians do not have enough of your money to spend; the problem is they have lacked the courage to prioritize where to use your limited resources and cut spending in other areas, like curbing the redistribution of wealth through state authorized tax credits.
Over the next few weeks I will share with you how we got to this point and then present the opportunities leaders in Jefferson City have to reform government so that it lives within its means. We shouldn’t and don’t have to raise taxes; we shouldn’t and don’t have to go into debt and bond; and we shouldn’t and don’t have to tap the state’s rainy day fund. Now is the time for true leaders to take a long look at where we are, where we are headed, and what must be done to ensure that your tax dollars are used effectively and efficiently. If politicians are serious about putting education first, this series will lay out what we still need to do to protect our children’s future.
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