Gov. Nixon proposes smaller state budget

JEFFERSON CITY, Mo. -- Gov. Jay Nixon proposed flat funding for public schools and cuts to colleges Wednesday while acknowledging during his annual State of the State speech that "times are tough" and even small job gains are cause for celebration.

The Democratic governor put forth a plan to slightly shrink the state's spending, shedding several hundred state workers and privatizing some of their functions while denying Missouri's remaining employees a pay raise for the third straight year.

Yet Nixon pledged "to be aggressive and relentless" in fighting for private-sector jobs.

"Times are tough. Too many folks can't make ends meet, can't find the jobs they want, or worry they'll lose the jobs they have," Nixon said in his speech to a joint session of the Republican-led House and Senate. "But even in these tough times, I'm optimistic."

Nixon proposed a $23.1 billion operating budget for the fiscal year that begins July 1 -- down at least a couple of hundred million dollars from the budget lawmakers approved for the current fiscal year.

His budget plan would provide K-12 schools an additional $112 million during the current year, thanks to an influx of federal money that must be spent this school year. But it would cut schools by $112 million next year. Nixon's budget director, Linda Luebbering, says schools will be asked to carry over some of this year's additional money into next year.

Even so, schools would be getting far less than the amount they are due. Schools were budgeted to get about $3 billion in basic aid this year. They would be due an increase of about $233 million next year if Missouri were to provide the full amount called for by its funding formula.

Public colleges and universities would take a 7 percent cut next year under Nixon's proposal -- an additional $64 million reduction on top of the roughly $50 million cut they received this year.

But Nixon proposed to reverse a small portion of the cuts he made this year to Missouri's main college scholarship programs. He also said he wanted to expand a community college scholarship to graduates of all high schools, instead of only some schools -- receiving bipartisan applause while reviving a pledge from his 2008 gubernatorial campaign. Nixon also proposed a bonus college scholarship to high school students who score well on certain math and science tests.

The governor delivered his speech as he begins gearing up for a 2012 re-election campaign. His likely opponent is Republican Lt. Gov. Peter Kinder, who delivered the Republican rebuttal.

In his speech, Nixon recounted a couple dozen specific instances in which businesses have decided to expand in Missouri with aid from his administration. He touted a commitment by IBM to add 800 jobs at a new facility in Columbia. And he praised the owner of a rural Missouri sawmill who used a $25,000 state loan to buy new equipment and hired three more workers.

"Every job we add matters," Nixon said.

Kinder, though, accused Nixon of "showboating and grandstanding" by taking "unnecessary trips on the state plane" to events around Missouri. Nixon regularly bills state agencies for the costs of his flights, instead of paying for them out of his own office budget.

"Governor Nixon has been AWOL on the issues that matter most to you and your family," Kinder said. "Sure, he loves the perks of the job -- the ribbon cuttings, the prime seats at sporting events, the taxpayer-funded airplane -- but he's nowhere to be found on the troubles facing our state."

Kinder and Nixon would agree on at least one thing. Both have shunned tax increases as a way of balancing the state's budget.

But Nixon proposed several steps to increase Missouri's collection of existing taxes.

He suggested a "tax amnesty" period for people and businesses that owe Missouri money but have not yet been cited by the Department of Revenue. If the businesses or individuals pay up, they can avoid penalties and be charged only half the interest they otherwise would owe. The governor's budget assumes the program will bring in $20 million that otherwise would not have been paid.

The program is part of nearly $50 million of assumed savings that are dependent upon legislators changing state laws.

Nixon also assumes savings from the elimination of several tax credits, including ones for movie makers and another for wine and grape producers. He also wants lawmakers to reduce the amount of annual tax credits that can be issued for the renovation of historic buildings.

Some of Nixon's toughest rhetoric came in his call for lawmakers to restore Missouri's campaign contribution limits, which the Republican-led legislature repealed a few years ago.

"Right now, anyone can write a check for any amount of money, and tip the balance of an election. That is corrosive to our democracy," Nixon said. That drew a standing ovation from Democrats, as Republican lawmakers sat silently.