Mo. agencies warn of consequences in cut scenarios

Friday, January 2, 2009

JEFFERSON CITY, Mo. (AP) -- Sheltered workshops for the disabled shut down. A veterans nursing home closed. College scholarships cut. Police security eliminated at the Governor's Mansion.

Those are just a few of the possibilities raised by state agencies that have responded to legislative requests for scenarios dealing with budget cuts of 15 percent to 25 percent.

Understandably, there is angst in state government as the 2009 legislative session begins Wednesday.

Legislative leaders say the economic recession is their foremost concern. The slowdown likely will mean spending cuts for some government services. It also is the impetus behind new job creation incentives being proposed by lawmakers and Gov.-elect Jay Nixon.

The focus for 2009: "Jobs, economic development, raising the standard of living of Missourians, making Missouri more competitive in the country" and the global economy, said incoming House Speaker Ron Richard, R-Joplin.

The 95th General Assembly will feature new leaders in the House, Senate and Governor's Mansion. And it will be a politically split government. Nixon is a Democrat but Republicans will hold a 23-11 Senate majority over Democrats and a 89-74 advantage in the House. The session runs from Jan. 7 to May 15.

The session will be starting with a good news-bad news pronouncement. The bad news: Budget cuts seem certain. The good news: The cuts of may not be as deep as the 15-25 percent scenarios.

House Budget Committee Chairman Allen Icet, R-Wildwood, said a 5-10 percent cut may be more realistic. Icet and Senate Appropriations Committee Chairman Gary Nodler, R-Joplin, say they asked state agencies to develop worst-case scenarios so they would have a better idea of the departments' priorities as they craft the budget for fiscal year 2010, which starts July 1.

Unlike the federal government, Missouri must maintain a balanced budget. So when revenue fall, spending does too.

Only the Department of Higher Education has publicized its spending cut report to lawmakers, warning that tuition hikes, faculty layoffs and scholarship reductions could ensue under a 15-25 percent cut. In the case of Harris-Stowe State University in St. Louis, the department warned that such cuts "would threaten the continued existence of the institution."

The Associated Press obtained copies of the reports from most other departments through open-records requests. A few, including the Department of Health and Senior Services, refused to provide the information, claiming the report was exempt from disclosure under the Sunshine Law.

In its budget-cut scenarios, the Department of Elementary and Secondary Education suggested the elimination of its annual Scholars and Fine Arts academies, a reduction in A-plus scholarships and in transportation aid to schools, and the elimination of funding for sheltered workshops.

As a result, "many of the 93 sheltered workshops would be forced to close" -- leaving about 7,500 disabled adults without jobs, the department said in its report.

Icet and Nodler both said lawmakers are unlikely to force the closure of sheltered workshops, even if they have to cut budgets by 25 percent. Rather than make realistic suggestions, Nodler said it seemed the department took "a political approach to try to create pressures" on lawmakers.

But the education department was not alone in warning of dire consequences.

The Department of Public Safety reported that budget cuts could force the closure of its veterans cemeteries and one of its veterans homes, resulting in the repayment of millions of federal construction dollars.

Capitol Police warned it could have to stop providing protection at the Governor's Mansion and reduce its staff at the Capitol. That could put an estimated 220,000 annual Capitol visitors -- a majority of whom are school children -- at a greater risk of violence similar to last year's fatal shootings at the Kirkwood City Hall, the report said.

Among other possible budget cutting outlined by state agencies:

-- The Department of Economic Development said potential job training cuts could effect between 5,875 and 9,875 workers, and a reduction in tourism promotion could result in a $175 million to $293 million decline in tourist spending in Missouri. It said a cut to the Office of Public Counsel could reduce its ability to affect rate cases, "and utility consumers' rates will be higher than they otherwise would be."

-- The Department of Transportation said it could have to eliminate one of the twice daily Amtrak passenger trains between St. Louis and Kansas City.

-- The Department of Agriculture said payments to ethanol and biodiesel plants could have to be reduced.

-- The Department of Labor and Industrial Relations said it could have to lay off investigators that handle discrimination complaints -- a move it said was counterintuitive because more people file complaints during economic downturns.

-- The Department of Natural Resources said it could be forced to reduce its water pollution control monitoring in southwest Missouri and eliminate county courthouse restoration grants.

A budget adviser for Nixon has said Missouri could face a $342 million budget shortfall during the remaining six months of the 2009 fiscal year.

Economists for the legislative and executive branches are still working on official revenue projections for the rest of this fiscal year and next. It's possible, legislative budget leaders say, that revenues for the 2010 fiscal year may still be lower than they were in 2008.

Thus the reason lawmakers are preparing for spending cuts.

"One of the strategies I would probably employ is to spread the pain as far and wide as possible, so everyone has to bear a little bit of the burden," Icet said.

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