July 10, 2012

By Katie Pohlman

Governer Jay Nixon approved Missouri’s nearly $24 billion budget for the fiscal year 2013 on June 22. The budget went into effect July 1.

Missouri’s new budget focuses on increasing funding for an assortment of job training programs, maintaining funding for K-12 public education and providing extra funding for disaster recovery.

When the budget was first proposed, there was an estimated $500 million revenue shortfall from last year. But with compromises such as a reduction in state funding of health care for blind Missourians and the passing of laws that allowed for casino revenue to fund veterans’ homes around the state, the Missouri General Assembly was able to declare that the state’s budget was once again balanced.

However, in signing the budget into law, Nixon announced an additional $15 million in cuts, more than half of which come from the budget for higher education. At a press conference discussing the cuts, the governor justified the cuts.

“You only spend the money you have available,” he said at the conference.

Nixon said he believes the budget is actually out of balance by around $50 million and that future cuts may be necessary.

Nixon said extra funding need to be put toward disaster recovery due to the events of the past year, such as the Missouri River floods in spring 2011 and the Joplin tornado on May 22 that same year.

Early childhood programs and K-12 public education will now rely on proceeds from a national settlement with tobacco companies and state lottery revenue, respectively, for funding. Education will receive $35 million from tobacco companies, according to an analysis by [The Missouri Budget Project](http://www.mobudget.org/home.html), a non-profit policy analysis organization. Lottery revenue includes selling tickets and collecting unclaimed prizes.

The budget predicts employment to increase 0.7 percent in fiscal year 2013. Along with introducing on-the-job training programs and investments to create jobs, the budget also calls for a pay increase for the state’s lowest paid workers. This wage hike will affect more than 50,000 state workers.

Nixon had originally proposed much more drastic cuts to the higher education budget, but the general assembly blocked them.

Approximately $8 million will be cut from higher education, making it the third straight year of cuts for colleges and universities across the state.

This includes a $4.37 million cut in state funding for the University of Missouri System. According to a news release by the UM System, reductions in operating expenses and elimination of positions will result from the funding cut.

“We realigned our budget to put more money toward strategic priorities, strategic initiatives,” UM System spokeswoman Jennifer Hollingshead said.

The Missouri Budget Project’s [analysis of the 2013 budget](http://www.mobudget.org/category/13/article/272-FY_2013_Budget_Relies_on_Risky_Assumptions) aligns with Nixon’s concerns that it is not actually balanced.

The organization says even though in theory the budget is balanced — meaning there is a designated source of funding for everything — the general assembly did not account for shortcomings in revenue or unforeseen expenditures. It points out that there are no reserves if those events were to happen.

“As a result, the FY 2013 may not be truly fully funded, which may necessitate $150-$200 million in mid-year budget reductions,” the report stated.