New state budget $1 billion larger but still balanced

JEFFERSON CITY, Mo. -- Republican lawmakers reveled Friday in the passage of a state budget that, after several austere years, boosts spending for seemingly everything and yet likely remains balanced.

The nearly $18.9 billion operating budget for the fiscal year that starts July 1 is more than $1 billion larger than the current budget.

It includes the biggest increase in basic school funding in four years; more money for colleges and universities, which had been hit hard by recent budget cuts; a $1,200 pay raise and better family health plans for almost all state employees; plus $600 million in growth for the Medicaid program over the budget adopted just one year ago.

Assuming the state's net general tax revenue grows by 4.5 percent, the budget will be balanced with $700,000 to spare, according to the Senate Appropriations Office.

"We have a balanced budget," House Budget Committee chairman Carl Bearden, R-St. Charles, declared at a Friday news conference while flanked by Republican leaders. "We have a budget that represents many of the priorities that the people of Missouri think are important."

Lawmakers finished passing the budget late Thursday night, less than 20 hours before the 6 p.m. Friday deadline set by the Missouri Constitution.

Gov. Bob Holden signed the first of the 12 major budget bills -- appropriating money for annual state debt payments -- into law later Friday. Chances are good the Democratic governor also will sign the rest, unlike last year when he twice vetoed the education and health care budgets while unsuccessfully pressuring Republicans to approve new taxes and revenue.

This year, the legislature's budget is slightly larger than the spending plan that Holden outlined in January, and it banks on rising revenue from existing state taxes, rather than the new taxes and other revenue measures that Holden proposed.

Holden's budget director, Linda Luebbering, said Friday that the legislature's budget appears to be in balance -- or at least close enough to count. That, too, is a sharp contrast from last year, when she insisted the legislature's budget plan was several hundred million dollars in the red.

But perhaps an even better indication of the state's revived spending ability lies in some of the smaller items in the budget: $1 million to videotape the stories of war veterans; $106,261 to restore the state's dam safety inspection program, eliminated under last year's budget; and $500,000 to open a branch revenue office in Los Angeles, where the state expects to recoup its investment eight times over by tracking down people or companies who owe taxes to Missouri.

The legislature's budget also keeps open a prison, two mental health centers and two health labs that Holden had proposed be closed in January, when the state's financial outlook seemed more dire.

Considering the state's improved fortunes, some Democrats suggested the Republican majority could have spent even more on education and health care.

For example, the nearly $2.2 billion in basic state aid for public school districts still falls about $600 million short of the full amount called for under the funding formula. And to satisfy House Republican demands for "Medicaid reform," the budget squeezes an estimated 324 low-income parents off the health care program through slightly tighter eligibility standards.

"We cut people off health care with a budget that's increasing 5.7 percent, and we didn't fully fund education, so I don't think that is a victory at all," said House Minority Leader Rick Johnson, D-High Ridge.

Actually, the budget grew more than 5.8 percent compared to last year.

And Republican and Democrats have generally agreed that fully funding the education formula is virtually impossible. A lawsuit pending in Cole County Circuit Court seeks to declare the state's school funding method unconstitutional for providing too little aid and distributing it unfairly.