Nixon cuts $280M from budget

Friday, June 18, 2010

JEFFERSON CITY, Mo. -- Education took a big hit Thursday in Missouri's latest round of budget cuts as Gov. Jay Nixon halved busing aid to public schools and significantly reduced college scholarships for the upcoming academic year.

Other cuts will affect people with chronic health problems, the mentally ill, the disabled who receive in-home services and developers who depend on state tax credits. An additional 255 state jobs will be eliminated, raising the total to about 2,500 positions since January 2009.

Nixon said the cuts are necessary because Missouri's tax revenue has continued to fall short of projections, and because legislators failed to pass several money-saving measures that had been assumed in their $23.3 billion budget.

Nixon signed the budget Thursday, allowing it to take effect July 1. But he announced about $300 million of reductions in general revenue expenses, including about $280 million in state program cuts and $20 million that will be offset by increased federal funding.

The cuts for the 2011 fiscal year come in addition to about $900 million in budget cuts enacted during the 2010 fiscal year that runs through June 30.

"Some might say we've been belt-tightening," Nixon said. "We may have had to punch another hole in the belt this time."

State lawmakers, education officials and advocacy groups reacted with a mixture of outrage and understanding.

"Gov. Nixon dealt tens of thousands of students from working and low-income Missouri families a devastating blow" by cutting scholarships, the Independent Colleges and Universities of Missouri said in quickly released statement.

The Missouri School Boards' Association expressed gratitude that Nixon didn't cut any of the $3 billion of basic aid to public schools. But "more kids may end up needing to walk to school or being transported by their parents" because of the busing cuts, said association spokesman Brent Ghan.

Senate Appropriations Committee Chairman Rob Mayer, R-Dexter, said the cuts to college scholarships and school busing are the hardest to accept. The busing cuts could especially affect rural K-12 school districts whose boundaries span many miles.

"However, I understand when you have revenues that just aren't at the levels you predicted, you have to take some drastic measures," Mayer said.

The biggest cuts announced Thursday include:

* $70 million from school transportation aid, meaning districts in the 2010-2011 academic year will get less than half the amount they were supposed to get in 2009-2010 before that also was cut. The latest reductions will lower the state's busing reimbursement rate to about one-quarter of schools' actual costs, the School Boards' Association said.

* $50 million from the Access Missouri college scholarship program, which had been budgeted to get $83 million next school year. The program offers financial-need based scholarships of up to $4,600 a year for students at private institutions, $2,150 for students at state universities and $1,000 for those at community colleges. The cut is estimated to reduce those scholarships to $1,000 at private institutions, $500 at state universities and $150 at community colleges, said state budget director Linda Luebbering.

Nixon also cut one-quarter of the $16.4 million budget for the Bright Flight scholarship, which is awarded based on students' scores on college entrance exams.

Part of the state scholarship cuts are expected to be offset with a one-time, $30 million scholarship grant from the Missouri Higher Education Loan Authority. That grant was approved last week but details remain to be worked out.

-- $47 million of reductions to Missouri's tax credit programs, which provide about $600 million annually of incentives, largely for developers and various social causes. Luebbering said much of the savings will come by applying a greater cost-benefit scrutiny to applicants; some tax credits may not be issued while others may be delayed.

A case-management program for Medicaid patients with chronic health problems will be sharply scaled back to serve only those with the highest medical costs. Although they will remain on Medicaid, the number of patients receiving case management will fall from about 163,000 to 3,400.

The governor cut payment rates by 2 percent for drug and alcohol abuse counselors, psychologists and others serving the mentally ill, and in-home care providers for the disabled. Nixon also cut funding for local public health clinics, agencies that serve the elderly and state inspectors for hospitals and nursing homes.

Nixon eliminated state aid for several programs, including a character education initiative, a student loan program for future health care professionals and training grants for adults who want to start agricultural businesses. He also ended state funding for MOREnet, which provides high-speed Internet connections to schools and libraries.

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