Judge says Holden can make budget cuts

JEFFERSON CITY, Mo. -- Gov. Bob Holden had the legal authority to withhold nearly $21 million in nursing home grants, a judge ruled Friday.

In withholding the money to help balance a tight budget, Holden followed the pattern of governors past, making use of a constitutional provision allowing spending cuts when revenue dip below expectations.

But nursing homes claimed in a lawsuit heard last month that Holden had no grounds to cut their funding because their particular revenue source had not fallen short of projections and was shielded from cuts.

The groups sought an injunction against the budget cut. But Cole County Circuit Court Judge Thomas Brown sided with Holden in a decision released Friday.

"The constitutional authority to reduce expenditures supersedes any statute or regulation of any agency that purports to require an expenditure the governor has reduced," Brown said.

$230 million in cuts

The lawsuit by the Missouri Health Care Association, the trade group for nursing homes and long-term care facilities, stemmed from $230 million in budget cuts announced in May by Holden.

Included in those cuts was $20.8 million in Medicaid grants to improve quality and efficiency at nursing homes.

The nursing home money had been appropriated as a mix of federal funds and intergovernmental transfer funds -- a category of state money originally obtained through an accounting gimmick that the federal government is cracking down upon.