Nixon outlines budget, policy priorities for Mo. in State of the State

JEFFERSON CITY, Mo. -- Missouri Gov. Jay Nixon proposed billions of dollars of new spending on government-run health-care and building projects Monday and vowed to lead a ballot initiative to impose campaign contribution limits if lawmakers failed to curb the growth of political money.

In his first State of the State address of his second gubernatorial term, the newly re-elected Democrat laid out perhaps his most ambitious spending plan yet, arguing that it was affordable because of an improving economy and past fiscal restraint.

"We now have a unique opportunity to build a better future for our children. We must seize it," Nixon said in his speech to a joint session of the Republican-led House and Senate.

Although Nixon praised bipartisanship, his speech drew sharply different reactions as he outlined his initiatives -- Democrats applauded frequently and Republicans often remained seated in silence.

Nixon proposed a $25.7 billion operating budget for the fiscal year that starts July 1, including a $900 million Medicaid expansion for low-income working adults that was called for under President Barack Obama's health care law. He did so even though Republican lawmakers have generally opposed the Medicaid expansion, citing fears about the potential long-range costs.

The governor announced his support for hundreds of millions of dollars of bonds for improvements to schools, parks and state buildings to be funded by the elimination of existing tax credits for low-income housing, the renovation of historic buildings and other programs. Nixon's budget plan also would eliminate a tax break for low-income seniors and disabled residents who rent their homes and direct the money to other services for them.

As he has in the past, the governor called upon lawmakers to reinstate Missouri's campaign contribution limits that were repealed in 2008. But this time, Nixon went further, vowing to lead an initiative to place the issue on the statewide ballot if lawmakers were unwilling to impose the caps themselves. He noted that voters already had approved campaign contributions limits once -- about two decades ago.

The governor argued that the Medicaid expansion was a sound financial decision embraced by many of Missouri's leading business organizations, whom he asked to stand. Again, Democratic lawmakers responded with an ovation while Republicans sat silently.

"Friends, let's put the politics of health care aside for just a moment," Nixon said as some Republicans chuckled, "and look at this as a business decision for the state of Missouri."

Nixon noted that Republican governors in some other states already have embraced the Medicaid expansion.

"Strengthening Medicaid will strengthen our economy," he said. "Without question, it's the smart thing to do."

Republicans cheered when Nixon acknowledged the fears that the federal government won't make good on its promises, and Nixon consequently proposed that Missouri could back out if that happened.

Republican House Speaker Tim Jones said in a prepared rebuttal to Nixon's speech that Republicans would not heed his call to expand Medicaid.

Jones, of Eureka, said Republicans could work with Nixon in some areas, but added: "Many of his new proposals, ones that would create a bigger, more intrusive government bureaucracy, threaten to create a chasm that no amount of bipartisanship can bridge."

Nixon's budget upset some Republicans because it is balanced on the assumption that lawmakers will approve a variety of measures to increase state revenue. It assumes more than $56 million from the elimination of a tax break for low-income renters; nearly $52 million from an amnesty period for people to pay overdue taxes; more than $46 million in new tax revenue and savings resulting from the Medicaid expansion; and more than $10 million from a law encouraging the collection of sales taxes on online purchases.

Many of Nixon's new spending proposals were focused on education. His budget plan includes a 4 percent increase for public colleges and universities to be distributed if they meet new performance criteria, such as student retention and graduation rates. It would more than double the state's spending on early childhood education programs. And Nixon proposed a $66 million increase to the state's $3 billion basic aid program for K-12 public schools -- though that still would fall $620 million short of the amount called for by the state's school funding formula.

Education also would benefit from a bonding proposal that some Republican and Democratic lawmakers already have been touting.

Though Nixon didn't embrace a specific dollar amount, he said the state could afford to issue less than $1 billion of bonds if lawmakers reduced the amount of money awarded through its many tax credit programs. He proposed that the bond money would go to K-12 school buildings; science, technology and mathematics facilities at public colleges and universities; a new state mental health facility; and state parks.