Governor, lawmakers, $370M apart on budget

JEFFERSON CITY, Mo. -- Missouri lawmakers could have to cut about $370 million from Gov. Jay Nixon's budget proposal if they don't want to go along with his optimistic revenue assumptions.

Republican legislative leaders were still fuming Wednesday about the Democratic governor's budget proposal, a day after he outlined it as part of his State of the State address.

"This budget, as I see it, is an absolute political fiction," Senate Appropriations Committee chairman Kurt Schaefer told Nixon's budget director during the first of what will be many hearings on the governor's proposal.

Nixon proposed a record-high $27.7 billion budget that would boost education funding by nearly $500 million, provide better pay and benefits to state employees and pour more money into such things as social services, parks and tourism promotion. That already has created tension with GOP lawmakers who want to spend less and tap into any surplus for an income-tax cut.

The governor's budget proposal typically serves as the starting point for lawmakers, who must pass their own version by early May. The legislative budget plan then goes back to Nixon, who can cut but not add to its expenditures. The 2015 fiscal year starts July 1.

Assumptions

Several differing financial assumptions have contributed to the gap between the governor and lawmakers.

* Nixon is using a rosier economic outlook to project that the state will net $66.5 million more in general tax revenue than Republican legislative leaders are expecting during the current fiscal year. Nixon similarly is projecting $148.5 million more in revenue than GOP lawmakers are anticipating for the 2015 fiscal year.

* Although Republican lawmakers are unlikely to do so, Nixon's budget assumes they will expand Medicaid eligibility for low-income adults under the terms of President Barack Obama's health care law. Nixon projects that a Medicaid expansion would result in $94 million in new revenue and cost-savings that he has incorporated into his budget plan.

* The governor similarly is assuming that lawmakers will pass a variety of bills that will generate about $60 million in additional state revenue. Most notably, Nixon assumes lawmakers will grant amnesty to overdue taxpayers to encourage them to pay up without facing penalties. He figures that would bring in about $52 million for the state's general fund. Lawmakers had included a tax amnesty provision in an income-tax cut bill passed last year, but Nixon vetoed that legislation because of concerns about the tax cut.

Republican legislative leaders already have said they don't plan to use Nixon's revenue figures or expand Medicaid eligibility. Prospects also are uncertain for the tax amnesty legislation and other proposed tweaks to state revenue-collection laws.

Schaefer said Nixon's budget plan is "inflated" and "bloated" and creates a "false expectation" of large funding increases for schools and various programs. Other senators on the Appropriations Committee also expressed frustration during Wednesday's hearing.

But Nixon's budget director, Linda Luebbering, downplayed the differences. She told The Associated Press that the governor and lawmakers have started with conflicting budget desires in previous years and still have been able to close most of their budget gaps.

"I don't think it's all that sizable in the grand scheme of things," Luebbering told The Associated Press. "We also have several months to discuss all of this."

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