Gov. Nixon: Jobs top priority in poor economy

JEFFERSON CITY, Mo. -- Gov. Jay Nixon declared job creation his top priority Wednesday while suggesting that Missouri's public schools and colleges should share the burden for Missouri's burgeoning budget woes.

In a State of the State address that acknowledged continued job losses and declining tax revenue, Nixon said Missouri must provide greater incentives for biotechnology firms, job training and existing businesses that expand locally.

He stressed that public schools would receive a record amount of money under his proposed budget for next year -- even though it would give K-12 school districts less than one-fifth of the funding increase needed to fully finance Missouri's school formula.

Nixon also proposed cuts for public universities and colleges, which have agreed to hold tuition flat in 2010-2011 to avoid even larger cuts. Nixon sought to soften some of the financial blow by urging an expansion of scholarships for community college students -- a pledge from his 2008 gubernatorial campaign that lawmakers have yet to fund.

The governor proposed a $23.9 billion operating budget for the 2011 fiscal year that would grow by a little more than 3 percent from the spending plan currently in place. It would do so by relying on nearly $1.2 billion in federal stimulus funds, some of which Missouri is not guaranteed to receive. Nixon's budget assumes Missouri will get about $300 million if Congress extends the federal stimulus payments to states by an additional six months.

Nixon's budget office announced Wednesday it also was redirecting $150 million of federal stimulus funds away from college building projects and incentives for high-tech battery manufacturers to instead help close a $200 million shortfall in the current budget.

Although Missouri has avoided the financial meltdown that has occurred in some states, "we still face sober -- very sobering -- financial challenges," Nixon said.

Though some Senate Republicans remain wary of creating more tax credits or incentive funds, Republican House leaders pledged to work with Nixon on economic development measures,

"The No. 1 issue on everyone's mind is the economy -- job creation and job retention -- and we will support the governor as we did last year on incentives," said House Speaker Ron Richard, R-Joplin.

But Lt. Gov. Peter Kinder, who is expected to run against Nixon in 2012, criticized Nixon's job performance in the official Republican response to the speech.

Kinder said in prepared remarks that Nixon "irresponsibly chose" to balance the budget with stimulus money last year, "and due to the governor's failure to act swiftly to address the budget crisis, we now face an even bigger shortfall."

Nixon's proposed budget includes no pay raise for state employees and would eliminate an additional 544 state jobs -- the majority in the Department of Social Services -- while bringing his two-year state payroll reduction to a little shy of 1,800 positions.

Nixon drew bipartisan applause as he urged lawmakers to mandate that insurers cover autism treatments for children, toughen drunken-driving laws and enact new ethics laws for Missouri politicians and lobbyists. But Republican lawmakers sat silently as Democrats applauded Nixon's call to reinstate Missouri's campaign contribution limits, which they repealed a couple of years ago.

Nixon also called for tighter restrictions on the payday loan industry, which he labeled as a "voracious predator."

Nixon's proposed budget

Missouri Gov. Jay Nixon proposed a 23.86 billion operating budget Wednesday for the 2011 fiscal year, which starts July 1, 2010. Here is a look at his proposed budget compared with previous years.

DEPARTMENT 2009 BUDGET 2010 BUDGET 2011 PROPOSED

Public Debt $98 million $92 million $78 million

K-12 Education $5.35 billion $5.42 billion $5.43 billion

Higher Education $1.27 billion $1.31 billion $1.25 billion

Revenue $442 million $436 million $432 million

Transportation $2.46 billion $2.27 billion $2.62 billion

Administration Office $319 million $306 million $294 million

Employee Benefits $837 million $955 million $980 million

Agriculture $77 million $65 million $63 million

Natural Resources $328 million $318 million $311 million

Conservation $146 million $146 million $146 million

Economic Development $316 million $338 million $283 million

Insurance $37 million $37 million $37 million

Labor $127 million $131 million $132 million

Public Safety $527 million $512 million $527 million

Corrections $670 million $665 million $673 million

Mental Health $1.16 billion $1.21 billion $1.23 billion

Health, Senior Services $855 million $893 million $936 million

Social Services $6.89 billion $7.46 billion $7.9 billion

Elected Officials $117 million $118 million $115 milion

Judiciary $190 million $190 million $190 million

Public Defender $37 million $37 million $39 million

Legislature $35 million $35 million $35 million

Real Estate $147 million $145 million $155 million

TOTAL $22.43 billion $23.09 billion $23.86 billion