Blunt says he won't seek restoration of Medicaid cuts

Friday, January 13, 2006

The governor said a budget surplus will not mean "going back to the old ways" of greater government spending.

On a short stop in Cape Girardeau Gov. Matt Blunt said that despite a possible surplus of $245 million, he will not ask legislators to restore Medicaid cuts. Instead, he will add $167 million to education.

The day after outlining his proposal for the state's 2006 budget in Jefferson City, Blunt stopped at Cape Girardeau Regional Airport on Thursday to tout the plan. He is on a two-day tour that will take him to eight cities in the state.

Citing the first governmental surplus in five years, Blunt said his budget reflects a wish to end wasteful practices and that his office "is committed to efficiency and responsible stewardship."

"Last year we dealt with the challenge of a $1 billion budget deficit," he said. "We had schools suffering from witholdings and an unsustainable growth in government. We now have a small but real surplus."

Calling education his highest priority, Blunt tabbed $167 million in new money for the state's schools. Of that money, the majority -- $137 million -- will go to public schools. Blunt would like to see 65 percent of the education budget spent directly in the state's classrooms. Seventeen million dollars is also set aside for university funding, an increase of 2 percent.

Blunt stressed that distributing this surplus will not mean "going back to the old ways" of greater government spending. He said critics who have called for returning Medicaid to some of the 90,000 Missourians who lost coverage last year should "be candid with the people of Missouri. Be honest with the people and tell them what programs you would cut or what taxes you would raise."

"We need to strengthen the safety net in a way that is affordable to Missouri taxpayers," he said.

Blunt has asked state legislators for an additional $275 million to maintain the state's current health programs and said restoring last year's cuts would cost taxpayers $935 million.

'A whole lot of stress last year'

But for some Missourians already affected by those cuts, that money won't be enough.

"We had a whole lot of stress last year," said Jody Blevins of the SEMO Alliance for Disability Independence, which is funded by Medicaid. She said 10 to 15 percent of the people receiving in-home services were cut off last year and that the number of people seeking SADI's help to pay for medications or utility bills has doubled.

"These are people that even if they are still covered by Medicaid, their premium is so high that they are making the decision of whether to pay for their medications or pay for rent," she said.

Blevins, the director of programs and human resources for SADI, also said some elderly clients have discovered that essential items such as walkers and bath-benches are no longer covered under Medicaid. This will not change under Blunt's proposal for 2006.

Medicaid costs make up 29 percent of the proposed budget. That is unchanged from last year.

In total, the operating budget for the fiscal year 2006 would increase from $19.6 billion to $20.9 billion. The fiscal year begins July 1.

Blunt also used the appearance to set some goals for the future. He proposed making ethanol a mandatory component in the gasoline used by the state's passenger vehicles.

"I believe very firmly in alternative fuels," he said. "Cape Girardeau is one of the really growing and dynamic parts of the Missouri economy. I believe things like an ethanol incentive will have a dramatic effect on Southeast Missouri and the price of corn. A biodiesel incentive will help soybean production."

Blunt pointed to the ethanol plant currently being constructed in Laddonia, Mo., as another beneficiary of the incentive plan.

Also on his agenda are plans to prevent abuses of the eminent domain law. Blunt called the precedent-setting 2005 Supreme Court decision on the Kelo case in Connecticut "a disservice to the people of our country." He plans to work with the state legislature to "protect homeowners, farmers and small business men and women."

Blunt drew connections between the surplus and some of the measures his administration took in 2005 to make Missouri more business friendly.

Bruce Domazlicky, an economics professor at Southeast Missouri State University, said that while there may be some connection it's still too early to tell.

"I think what has happened is that income has gone up because of capital gains taxes, which the state takes on stock-market earnings," he said. "The economy has been better than expected, and that means capital gains and sales tax revenues are better than expected."

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