House panel trims Missouri's mid-year budget adjustment

JEFFERSON CITY, Mo. -- Lawmakers have trimmed about $7.3 million from Missouri's proposed mid-year budget increase of nearly $500 million.

The House Budget Committee approved the reductions Wednesday along with limits on Gov. Jay Nixon's travel expenses and less flexibility in how some health-care funds are spent. Proposals for soil erosion projects and a grant program for ethanol-blended fuel pumps also were reduced.

More than $26 billion had been budgeted for the fiscal year that ends June 30. But growth in Medicaid costs exceeded expectations, and those expenditures -- which comprise the bulk of the governor's supplemental request -- are mandatory under federal law.

More spending on medicine was the biggest driver of the new Medicaid costs, said Nixon's budget director Dan Haug. The program's caseload also has increased, he said, but most of the new patients are children, whose costs are lower because they typically have fewer chronic illnesses.

Some Republicans have said spending on health and social services programs such as Medicaid is spiraling out of control. In the Senate, lawmakers are warning they will have to start cutting other programs unless Medicaid costs come down.

"We can't just allow this, by default, to consume all of our resources," said Sen. Kurt Schaefer, chairman of the Senate Appropriations Committee, during a hearing Monday on the department's budget.

Schaefer said if Medicaid costs continue to outpace the tax revenue growth, the state might have to underfund it, which would mean not fully reimbursing some doctors and pharmacists.

"At some point, we're just going to have to pull that pin and see what happens," he said.

The supplemental budget will next go the House floor.