Holden won't free funds for colleges, nursing homes

JEFFERSON CITY, Mo. -- Citing a larger than expected cash balance as the state's fiscal year nears its end, House Republican leader Catherine Hanaway on Friday called upon Gov. Bob Holden to release $100 million he withheld from colleges and nursing homes.

Holden's office said he would not do so, because the state needs the money to pay bills as it begins its 2003 fiscal year on Monday.

At issue are cuts Holden announced in May to help balance the current budget. State colleges and universities lost $83 million and nursing homes lost nearly $21 million in grants.

At the time Holden made the cuts, the state was expected to finish the 2002 fiscal year that ends Sunday with $186 million in its general revenue account, the main pot of money for paying bills.

But on Wednesday, Holden said the state now expects to end the fiscal year with about $300 million in general revenues.

Given that, Hanaway said the money withheld from nursing homes and higher education institutions should be spent. Hanaway, of Warson Woods, was traveling from St. Louis to Columbia and Kansas City promoting her message on Friday.

"The governor did not have to make these cuts in the first place, and he should restore this money now," Hanaway said. "There was and is enough money in the budget to restore these funds."

But state budget officials said the $300 million balance still is less than desired. For example, the state ended the 2001 fiscal year with a $439 million balance, considered at the time to be the lowest in about a decade.

Lowest in 20 years

The $300 million balance would be the lowest in about 20 years, said Mark Reading, assistant director of office of budget and planning, which reports to Holden.

"With an operation the size we are, you need a prudent cash balance," Reading said. "We've got bills that we'll be paying as soon as the new spending authority comes up next week."

Holden spokeswoman Chris Kelly said the governor regretted making cuts to nursing homes and higher education, but believes they were necessary because House Republicans -- led by Hanaway -- refused to allow the use of the so-called Rainy Day Fund to supplement state government either this year or next.

"The governor has chosen to be proactive and forward thinking when it comes to fiscal management," Kelly said. "To spend your checking account down to zero would not be smart."