Missouri's Days-Old Governor Cuts $146 Million From Budget

Gov. Eric Greitens cut $146 million from the state budget Monday in response to a lingering slowdown in state revenue.
by | January 17, 2017 AT 10:35 AM

By Kurt Erickson

Gov. Eric Greitens cut $146 million from the state budget Monday in response to a lingering slowdown in state revenue.

Missouri's new chief executive took aim at spending on state universities and transportation programs as part of his budget-cutting maneuver. His predecessor, former Gov. Jay Nixon, had already pared more than $200 million from the state's $27 billion spending blueprint before leaving office last week.

The move came the day before Greitens delivers his first State of the State speech since being elected as a political newcomer in November.

Greitens, a Republican who was sworn into office on Jan. 9, is expected to outline his policy goals for the upcoming legislative session in the 7:30 p.m. speech on Tuesday.

But he is departing from tradition and not planning to outline an overall spending plan for the fiscal year beginning July 1. Those details, including a plan to close an estimated $456 million gap in revenue, likely will come in early February.

Democrats say the lack of an overall budget plan is troubling.

"It's not as if the governor and his staff have not been aware of these issues for two months," said Assistant House Minority Leader Gina Mitten, D-Richmond Heights. "One would think the governor would be focusing on being fiscally responsible."

As for Monday's action on the current year budget, aides said Greitens had been reviewing the spending plan since before Thanksgiving.

Higher education bore the lion's share of the burden, with funding cuts topping $82 million. Harris-Stowe State University lost $101,400 for graduate programs. A cybersecurity training program at Southeast Missouri State University lost $101,400.

"Not a single penny will be taken out of K-12 classrooms," Greitens said in a social media video accompanying the announcement.

But Greitens did cut $14 million on programs affecting schools, including $8.6 million for busing and $194,000 for teacher training and development programs.

"You elected me because I'll always tell it like it is, and more hard choices lie ahead. But as Missourians, I believe that we must come together, tighten our belts, be smart and wise with our tax dollars, and work our way out of this hole by bringing more jobs with higher pay to the people of Missouri," Greitens said.

Few details

The restrictions were targeted at rolling back earmarks, new spending items, programs with no established track record of success, and services that are duplicated elsewhere in government, a news release noted.

Additional details were not immediately available on the reductions. Greitens announced his decision by social media and a news release. His aides did not immediately return messages seeking clarification on some of the cuts.

The cuts address projections showing the state on track to end the fiscal year $39 million in the red, which would violate the state Constitution's balanced budget provision.

Although individual income tax collections have been steady in the current fiscal year, corporate income taxes have lagged behind estimates. The decrease doesn't necessarily signal a downturn in business activity, but reflects a 2011 law that jump started a phase-out of the corporate franchise tax.

For calendar year 2016, revenue from corporate income taxes declined by 26.5 percent from 2015, a $64 million decrease in tax revenue.

Greitens said it was the first step in what could be $700 million in cuts to the state's $27 billion spending plan. He did not address the possibility of seeking a tax increase to close the gap, but he and GOP lawmakers have consistently dismissed that as a possibility in the past.

Tuesday's speech will be streamed live on the governor's website -- governor.mo.gov -- as well as on the House and Senate websites.

Work ahead

Greitens, a political newcomer, laid out the tenets of his approach to governing in his Jan. 9 inaugural speech. The former Navy SEAL wants to make individuals less reliant on government to solve their problems.

Greitens is expected to focus his efforts on many of the issues he made promises about during his run for office against Democratic Attorney General Chris Koster.

Key among those were making Missouri a so-called "right-to-work" state, in which workers could not be forced to pay union dues.

He also said he wants to clean up the culture of Jefferson City, by banning gifts from lobbyists to lawmakers and imposing term limits on all statewide offices.

Greitens also has signaled support for reforming the state's legal system to make it harder for plaintiffs to win large awards. The Maryland Heights native, 42, also is pushing plans to reduce regulations on businesses.

Lawmakers have already put many of his pet projects in the legislative pipeline, hoping to overcome years of rejection from Nixon, a Democrat who blocked high-profile GOP initiatives with his veto pen.

As an example of work already underway by lawmakers, a House committee will discuss proposals Wednesday that would create a Blue Alert System, which would assist in the identification and location of any person suspected of killing or serious wounding a law enforcement officer.

Sen. Andrew Koenig, R-Manchester, agreed that the delay by Greitens in unveiling an overall budget plan was unfortunate. But he said the Republican majority will work well with the new governor.

Koenig, a former member of the House who won a seat in the Senate in November, said he's hopeful the governor focuses on reducing what he calls "corporate welfare." Koenig said he was encouraged when Greitens announced he opposed tax credits for a proposed new soccer stadium in downtown St. Louis.

Koenig is less enthusiastic about a Greitens initiative that would lengthen the waiting period for lawmakers to become lobbyists. The Legislature last year imposed a six-month cooling-off period. Greitens wants the waiting time to match the number of years a lawmaker has served in the House or Senate.

"We already fixed that problem," Koenig said, suggesting that Greitens wait for a year to see how the current ban works before pushing for his own proposal.

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