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MPANewsBook: 1/30/2009: Archived file

Gov. Nixon delivers State of the State address «Entered: 01/27/2009»

[Jay Nixon addresses the joint session of the Missouri General Assembly on Tuesday. House Speaker Ron Richard, left, and Lt. Gov. Peter Kinder are seated behind him.]

Gov. Jay Nixon emphasized budget cuts, job creation, a steady commitment to public education and an expanded health care system in proposing a state budget Tuesday (Jan. 27). Nixon recommended balancing a projected multi-million-dollar budget deficit in fiscal year 2010 with cuts to 50 state programs and reliance on an anticipated federal stimulus package that is working its way through both chambers of the U.S. Congress.

Tuesday night's State of the State address was the new Democratic governor's first appearance before the Missouri General Assembly.

The proposal he laid out contains a $23 billion operating budget -- up 2.25 percent from the current 2009 fiscal year which ends June 30.

Nixon's address received mixed reaction from Republicans, who hold a commanding majority in both chambers of the Missouri Legislature. They applauded efforts to create jobs and to not raise taxes, but were noticeably silent when Medicaid expansion was mentioned.

JOB CREATION 

The address first focused on bringing jobs to Missouri, which, Nixon said, faces its highest unemployment rate in 25 years.

"We must create new jobs, and we must do it now," Nixon told the crowd assembled in the House chamber.

He unveiled a "Show Me Jobs" plan that includes offering new, low-interest loans for small businesses as well as forming an Automotive Jobs Task Force to identify policies that could grow the state's automobile manufacturing industry.

A "Quality Jobs Act" would offer incentives to businesses that create new jobs in the state, Nixon said.

He urged state lawmakers to send him a emergency jobs plan to sign before a mid-session recess in March. 

EDUCATION

Another component of Nixon's address was repeating a vow to keep tuition and state appropriations for Missouri public universities steady.

In exchange for funding higher education in fiscal year 2010 at the FY09 level, Nixon said tuition rates would not rise.

"In the past, when the state has faced challenging economic times, higher education has often been the first target for cuts," the governor declared. "Not this time."

HEALTH CARE

Although Nixon proposed  a largely lean budget, he proposed an expansion of the Medicaid program that provides health care coverage for the lower income.

"In Missouri, there are 100,000 children among our uninsured who are right now eligible for health coverage under Medicaid or the State Children's Health Insurance Program but are not signed up," the governor said. "That's unacceptable."

Nixon's plan would expand coverage to 62,000 more Missourians. He said much of the program's cost would come from federal matching funds.

The governor rationalized the expansion from a job creation standpoint, too, saying companies are reluctant to locate in the state because health care costs are so high.

"Reducing the number of uninsured Missourians is not just the right thing to do for our neighbors," he told state legislators. "It is the smart thing to do for our economy."

Nixon's proposal met with immediate opposition from Republican legislators.  It was under the administration of former GOP Gov. Matt Blunt that deep cuts were made in Medicaid coverage.

BALANCING THE BUDGET

What will be trimmed under Nixon's proposal are 50 government programs, accounting for 1,300 positions that would either be eliminated or go unfilled. The governor did not elaborate on where, specifically, those cuts will be made, but according to Nixon's staff in a Tuesday afternoon budget briefing, they would save $292 million in the next fiscal year.

With the national economic downturn, Nixon's administration predicts only a minimal growth in state tax collections.  However, his budget is balanced by using an anticipated $809.2 million in federal stimulus receipts from a stimulus package currently under consideration in Washington D.C. That potential federal funding would account for nearly 9 percent of the $8.95 billion in revenue that Nixon estimates will be available the next fiscal year that begins July 1.

"We have every reason to believe that a federal recovery package will soon be passed by Congress, and money will be sent to the states to help create economic growth," the governor said. "We've been working closely with the Obama administration and our congressional delegation on this matter."

A $819 billion plan won approval in the U.S. House of Representatives Wednesday but has not received a vote in the U.S. Senate. It is expected to make its way to President Barack Obama for signature in mid-February.

REPUBLICAN REACTION

Republican legislative and budget leaders rejected Nixon's proposal to balance the state's budget on the basis of predicted federal funds.  They warned that there is no guarantee the money would continue in future years or have strings attached.

"I don't think it's ever wise to rely on the federal government, whether you're an individual or state budget," said Sen. Delbert Scott, R-Lowry City and the legislature's senior member.

He added that any federal money the state does receive should be spent on one-time expenditures rather than ongoing programs that could disappear "when the Washington money dries up."

"If you're talking about capital expenditures, building highways, improving college buildings ... I think that's worthwhile," he said.

In a formal response to Nixon's address, Missouri's lone Republican executive, Lt. Gov. Peter Kinder, expressed similar concerns.

"The governor has proposed a state budget built around the hope of a federal bailout," Kinder said. "What if these dollars don't arrive? What if we don't get nearly as much as expected? Can we really spend our way back to prosperity? A budget based on a one-time bailout is no long-term plan."

Asked about Nixon's plan to expand health care coverage, Missouri House speaker Ron Richard, R-Joplin, simply replied, "We're not going to do that. 

"We have a plan for health care and we'll be coming out with that around Feb. 1."


A college student in Kansas gets the spotlight in the Missouri governor's State of the State address «Entered: 01/27/2009»

[Jennifer Long sits with her father in the House Chamber during Gov. Jay Nixon's State of the State address.]

Although most formal addresses to joint legislative sessions by presidents and governors focus on the triumphs of the common citizen, Democrat Gov. Jay Nixon focused on one of the failures of Missouri's higher education system.

In his State of the State address Tuesday (Jan. 27), Nixon introduced a Missouri native who was forced by tuition costs to leave the state in order to go to college.

Jennifer Long completed the A+ program -- which allows students to attend a two-year state college if they meet academic and personal qualifications -- at Longview Community College in Lee's Summit. Despite wanting to stay in her home state of Missouri, she decided to go to Pittsburg State University in Kansas because it provides in-state tuition to residents in Missouri counties that border Kansas.

Long and her parents were invited to attend the legislative session and were introduced to the chamber by Nixon during his speech.


Transportation needs top list for federal relief funding «Entered: 01/30/2009»

Members of a state Senate committee charged with overseeing the receipt of federal stimulus funds said Wednesday (Jan. 28) that the more than $800 million that Gov. Jay Nixon has included in his budget proposal for fiscal year 2010 should go, predominantly, toward one-time expenditures rather than keeping ongoing programs afloat.

"Especially when we're looking at expansion of programs, I think we need to tread very lightly and not obligate the state for money that's likely to not be there just over two years from now," said Sen. Tom Dempsey, R-St. Charles.

Dempsey's concerns were echoed by many of the 10 Republican senators on the 13-member commission.

Sen. Luann Ridgeway, R-Smithville, went as far as saying, "I'm half inclined as a legislator to tell the federal government to take their stimulus and shove it."

But, Ridgeway, who said residents in her district "probably pay more federal taxes than they do state taxes," then added, "That's probably not likely to happen because everybody seems to be at the trough for our federal dollars."

She repeatedly asked Paul Wilson, senior counsel to Nixon on finance and the budget, whether the governor intended to fund recurring, ongoing programs like Medicaid with federal stimulus funds.

Wilson's reply was that all expenditures would be one-time expenditures, because, by nature, the governor and legislators are working with a single-year operating budget.

In Washington D.C., on Wednesday a stimulus plan won approval in the U.S. House. According to reports by The Associated Press, the House plan may include $688.3 million for Missouri highways and bridges, $74.8 million for mass transit and $344.2 million for school modernization. 

The plan still awaits a vote in the U.S. Senate. It is expected to reach President Barack Obama's desk for signature prior to the Legislature's President's Day recess Feb. 16.

As far as how some of those federal relief dollars will be spent in Missouri, state Department of Transportation director Pete Rahn, on Tuesday, noted a list of 34 infrastructure improvements that could be considered. They range from $137 million of work on Interstates 70, 44, 55, 35 and 29 to millions of dollars in local road and bridge work. According to him, $88 million would necessarily go toward infrastructure improvements in St. Louis, Kansas City and Springfield.

Rahn said the additional $30 billion Congress might allocate for transportation would be approximately 70 percent of annual appropriation. He added, however, "This is not an avalanche of funding for roads and bridges that's going to solve our crumbling roads and bridges ... It's extra money that's very much appreciated, but it's not a silver bullet.

"Stimulus dollars are coming at a critical time for us ... but really (they) only buy us some time until Missouri decides what to do with transportation on our own."


House, Senate members reject a pay raise for themselves. «Entered: 01/26/2009»

Missouri's House of Representatives adopted a resolution Monday (Jan. 26) rejecting the state salary commission's recommendation for pay raises for statewide elected officials, legislators and judges. The state Senate followed suit later in the week with a 32 to 1 vote.

The salary commission is composed of private citizens who do not hold government office.

Under the state Constitution, their recommendations for pay hikes automatically take effect unless rejected by the House and Senate.

The recommendations, made every two years, routinely have been rejected by lawmakers.


Office of Administration suspends projects at state universities «Entered: 01/30/2009»

Gov. Jay Nixon's administration has suspended 31 building-construction projects that were to be funded by the sale of assets held by the Missouri Higher Education Loan Authority (MOHELA).

Letters from Nixon's Office of Administration released Tuesday (Jan. 27) explained that MOHELA has experienced "financial duress" and can no longer support the "projected funding for capital improvement projects."

At the urging of former Gov. Matt Blunt, the legislature had approved transferring $350 million from MOELA to support the "Lewis and Clark Discovery Initiative" that largely focused on higher education facilities.  As attorney general, Nixon had been critical of Blunt's proposal.

The Lewis and Clark fund would have financed 31 projects for 14 state universities and the Coordinating Board for Higher Education, but, due to insufficient capital within the loan authority, those projects have been put on hold.

"Please be advised that unless and until you receive express written authorization from this office to the contrary, any expenditure of funds on any of the foregoing 13 projects for any reason or by any entity will not be reimbursed or paid for with funds from the (Lewis and Clark fund) or any other state appropriations," said a letter from a staff member of the Office of Administration to Nikki Krawitz, UM System vice president of finance and administration. "I will notify you as to whether there are sufficient funds in the (Lewis and Clark fund) to proceed."

Higher education officials received notification of the fund suspensions Wednesday morning, just hours after the governor had made his budget presentation to the legislature.  His address did not make any mention of the cuts..

"Given the current financial situation in the state and nationally, I suppose it's not too surprising that the state would have to re-examine its priorities," Caldwell said. "On the other hand, there had been no discussion of this previously, so in that context, I was a bit surprised."

The Lewis and Clark fund took effect in fiscal year 2008. According to the Department of Economic Development, MOHELA's board agreed to finance the Lewis and Clark fund over six years, with $5 million quarterly payments that would transfer a total of $350 million to the state.

According to the plan's layout, the financing for the 31 projects under the Lewis and Clark fund would not go through the normal budget process, wherein the General Assembly must approve of its design and execution. A document addressing questions about the fund and released by the state Economic Development Department said "the transfer and expenditure of moneys by MOHELA, the Missouri Development Finance Board, the Missouri Health and Educational Facilities Authority and other similar boards are separate and distinct from the state treasury and therefore outside of the state's budget process."

Asked for comment, state Rep. Chris Kelly, D-Columbia, said he has always opposed the Lewis and Clark fund. He questioned the wisdom and legality of using MOHELA money, which he said, was designed for student loans and not for capital improvement projects.

"I knew that MOHELA scam was in a lot of trouble," Kelly said. "I didn't know it was in this much trouble. This is probably -- although nobody will admit this -- the death knell of the MOHELA deal, the whole Lewis and Clark fiasco. It died because the market killed it, and it was so structurally dysfunctional that it was actually never going to happen."

He added, "It was always mythology ... I wish this were not true, because I want the buildings. But that's all this ever was, an empty promise."


Public Service Commission approves utility rate increase «Entered: 01/30/2009»

In a 3-2 vote Tuesday (Jan. 27), the Missouri Public Service Commission approved a request by St. Louis-based AmerenUE to increase consumer rates in an effort to offset increased expenditures on fuel, infrastructure improvements and future reliability. 

The decision is expected to bring $162.6 million in revenue to the company, Missouri's largest electric provider. Residents in the state that receive services from AmerenUE can expect to pay an average of $5.88 more on their utility bills, the Public Service Commission estimates. It is unclear when the rate hikes will take effect.

Also in Tuesday's decision, the commission rejected AmerenUE's attempt to recover the cost of a filing for a federal operating license for a second nuclear power plant in Callaway County through rate increases.

Commission chairman Robert Clayton said, "There was an unanimous agreement that the costs associated with Callaway 2 violate what's called the anti-CWIP law or the anti-Construction Work in Progress law that was passed by ... voters some 30 years ago."

The law forbids utilities from covering the expenses associated with building a new power plant before it is operational. Repeal of the law would require a passage of a bill in the Missouri Legislature.

In defense of AmerenUE's proposal, spokesman Mike Cleary said, "We felt that those costs were appropriate, because they're aimed at ensuring reliable service for our customers in the future."