Gov. Blunt seeks spending boost, boasts of change

JEFFERSON CITY, Mo. -- Gov. Matt Blunt proclaimed he had changed Missouri for the better by controlling state spending, then proposed Tuesday night to dip into his savings for an election-year spending plan benefiting education, health care and scores of other initiatives.

Delivering his fourth State of the State speech, the Republican governor declared Missouri's economy growing, its schools improving and its health care system transformed since he took office in January 2005.

"Change is working," Blunt said to the applause of Republicans gathered for a joint session of the House and Senate. "Missourians are prospering."

His Democratic challenger, Attorney General Jay Nixon, asserted that Blunt had changed the state for the worse, particularly by stripping hundreds of thousands of low-income people of their government health care.

"It's time to change direction, and Democrats are ready to lead," said Nixon, looking ahead to the November elections.

Spending priorities are at the heart of the dispute between Blunt and Nixon.

Blunt contends Missouri was losing jobs at "an alarming and unacceptable rate" and the state budget was "broken and ruined by profligate spending" when he took office.

As one of his first moves, Blunt proposed to eliminate or reduce Medicaid health-care benefits as a way to balance the budget and avoid what he dubs "job-killing tax hikes." Since then, Missouri's Medicaid rolls have fallen by about 170,000 people, the number of the state's uninsured has risen and the state has built up a cash surplus.

Nixon said his top priority would be to restore those "devastating health-care cuts to every single Missourian who had their coverage or benefits slashed." Contrary to Republican assertions, Nixon said, the Medicaid cuts could be restored by using existing state revenue, without any new taxes.

Blunt proposed a nearly $23 billion budget for the next state fiscal year, seeking to boost state spending at twice the expected growth rate for state revenue. Blunt's budget chief said the disproportionate spending hike was possible because of a large amount of money carried over from past years of government savings and strong economic growth.

For example, Blunt is proposing to spend three-fourths of the $200 million that legislators intentionally left unspent last year at his request.

A budget summary distributed by his administration highlights 119 separate proposed spending increases.

One of the chief beneficiaries would be the Medicaid program, which was renamed as MO HealthNet last year under a Blunt-backed law that injected a greater emphasis on preventive health care. Medicaid spending would rise by $483 million to a total of $7.2 billion, said Blunt budget chief Larry Schepker.

Some, but not all, of the low-income working adults cut from Medicaid three years ago could qualify for a government-subsidized health insurance plan that Blunt is marketing as Insure Missouri. His budget proposes nearly $348 million for the new program next year, though most of that money would come from the federal government and a redirection of existing state money.

Nixon criticized Blunt's plan as a "health-care scheme" that would benefit insurance companies more than Missouri residents.

Blunt's budget includes a $121 million funding increase in basic aid for K-12 public schools, raising the total to nearly $3 billion, Schepker said. Public colleges and universities also would get more money, though their appropriations still would fall short of their high mark in 2002, when a string of budget cuts began.

Money available for college scholarships would rise significantly for the second straight year, under Blunt's plan. State employees would get a pay raise, and Missouri would expand tax breaks for military veterans and alternative fuels, among other things.

"My budget will increase opportunity and reduce taxes," Blunt said during his nearly 50-minute speech.

Nixon said the fact that Blunt and Republican lawmakers have extra money to spend is not surprising. He said that reflected failure -- not success.

"They'll have you believe it's because of good management, but we know better," Nixon said. "Make no mistake. The money sitting in the state's bank account isn't there because of sound fiscal policy; it's there because this governor failed to fund the priorities that would move Missouri forward."

Blunt had trickled out most of his budget and policy priorities in the months leading up to his State of the State speech.

Among his proposals: the death penalty for child rapists; new protections from large property tax increases; a biodiesel mandate to match Missouri's new ethanol requirement for gasoline; and a weeklong "Show-Me Green" tax holiday that would suspend sales taxes on energy efficient appliances.

Blunt has traveled the state promoting efforts to crack down on illegal immigration. Nixon also has proposed new penalties for businesses that knowingly hire illegal immigrants.

Since he directed the Missouri State Highway Patrol in August to check the residency status of everyone it incarcerates, the patrol has turned over 138 illegal immigrants to federal authorities, Blunt said.

On Tuesday, he reiterated his call for new laws targeting illegal immigrants, including one requiring residency verification before providing people with state services.

"Missourians know what needs to happen: Turn off the magnets that help attract mass illegal immigration," Blunt said to applause.