Blunt makes education top budget priority

JEFFERSON CITY, Mo. -- Gov. Matt Blunt proposed $1.1 billion in core state budget cuts -- including to the Medicaid program -- so the savings can be used to increase funding for public schools and other priorities he outlined in his first State of the State address Wednesday.

Overall, the Republican governor's $19.21 billion state operating budget for the fiscal year beginning July 1 would increase total state spending by $59.5 million from the current year.

During his 44-minute speech before a joint session of the Missouri Legislature, Blunt said significant cuts in services provided by some state agencies, particularly mental health and social services, were necessary to focus resources elsewhere. He also pledged to oppose "job-destroying" tax increases that his Democratic predecessor, Bob Holden, had unsuccessfully pursued for two years.

"This budget is not built on tax increases," Blunt said. "I do not, and I will not, support increasing the tax burden on Missouri families. This means that we must make responsible and often difficult decisions in the rest of the budget."

Improving public education will be his administration's top priority, Blunt said. His budget proposal calls for an additional $170.6 million in direct state aid to local schools, a 4.7 percent increase over the current year. The money will come from expected growth in revenue collections and reductions in administrative costs at the Department of Elementary and Secondary Education. The spending increase still falls well short of fully funding of the state formula for distributing education money to local schools.

Blunt said the current formula has exacerbated the funding disparities between rich and poor districts and called on lawmakers to fix the problem this year.

His bold, three-pronged solution, however, is likely to stir controversy. Blunt's education plan calls for:

* Allowing districts with substantial local wealth to opt out of the formula so money could be redirected to poorer districts. In exchange for forgoing state revenue, districts would be no longer be subject to most DESE regulations.

* Taking revenue from legalized gambling out of the formula and distributing it equally to districts on a per-pupil basis.

* Giving districts the option of replacing local property taxes with a sales or income tax.

Democrats' response

Providing the official Democratic response following the speech, Attorney General Jay Nixon questioned whether the governor's education plan is constitutional.

"It is clearly a political cop-out to try to make the books balance," Nixon said. "This is a difficult issue and requires deep and serious thought. It's not a serious thought to say we're going to solve the foundation formula problem of this state by saying the laws don't apply to rich people."

While providing more money for K-12 education, Blunt's budget would hold the Department of Higher Education's budget flat at about $1 billion. Southeast Missouri State University's appropriation would remain at $43.8 million -- the same as the current fiscal year.

Rather than being disappointed about the lack of a funding increase, Southeast president Dr. Ken Dobbins said that under the circumstances he was pleased the university won't lose money.

"When you look at how they had to balance the budget with a $750 million to $800 million shortfall and the very small amount of new revenue coming in, I think higher education should consider itself fortunate," Dobbins said.

Blunt's suggestions for squeezing more money out of the existing budget include cutting more than 1,000 jobs from the state's 60,000-plus work force and closing the 11 state-run license bureaus, replacing them privately operated offices such as those currently in place in most counties.

The big savings, however, would comes from tightening eligibility requirements for Medicaid and reducing or eliminating optional services offered through the program. Cutting the medical assistance program for the poor wasn't an easy decision, Blunt said, but a necessary one given its ever-increasing cost that will save the state $626 million.

"Now is the time for decisive action," Blunt said. "Missourians can no longer afford the second most expensive Medicaid program in the United States."

Commissioner of administration Michael Keathley said thousands of Missourians would lose their Medicaid benefits under the plan, but he couldn't say exactly how many.

Democrats quickly attacked Blunt for going back on a campaign pledge to oppose Medicaid reductions.

"To break a very clear promise you made during the campaign right out of the gate is not a way to build trust with Missourians," said State Auditor Claire McCaskill, the Democrat whom Blunt defeated in November.

mpowers@semissourian.com

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