Nixon targets $430M in spending

JEFFERSON CITY, Mo. -- Gov. Jay Nixon vetoed or delayed $430 million of spending Thursday in moves that will halt college building projects and eliminate about 200 state jobs.

Nixon proclaimed the $105 million in line-item vetoes a "near record" amount for Missouri, putting them in the context of a state unemployment rate that is at a generational high. The Democratic governor froze an additional $325 million of budgeted expenditures, which could be released later if state finances improve.

"These fiscally responsible steps are necessary to ensure that Missourians have a government we can afford without raising taxes and without sacrificing our shared priorities of education, health care and jobs," Nixon said at a Capitol news conference after signing the state budget.

The legislature passed a $23 billion operating budget for the fiscal year beginning July 1, plus a two-year, $600 million capital improvements bill that includes various projects funded with federal stimulus money.

Four-fifths of Nixon's spending reductions came from the capital improvements bill. By committing less stimulus money upfront for construction projects, Nixon is reserving the money for potential budget gaps later in the 2010 fiscal year or in 2011.

The Republican chairmen of the House and Senate budget committees concurred Thursday that spending reductions were necessary because of the economic recession, though they took issue with some of the specific programs targeted by Nixon.

"Circumstances are what they are, and the dollars available are what they are: They won't accommodate the full budget we projected," said Senate Appropriations Committee chairman Gary Nodler, R-Joplin.

The cuts to the 2010 budget passed by legislators were necessary because individual income taxes, which make up a significant portion of the budget, have fallen short of expectations.

The line-item vetoes include a nearly one-fifth reduction in the money available for a new emergency responder radio system, which Nixon said still would be adequate to improve communications for the highway patrol and other agencies.

Nixon also reduced funding for ethanol plant subsidies, cut in half a Medicaid rate increase for dentists, and eliminated a Chinese marketing program for Missouri agriculture products and an electric tracking system of customers who bought pseudoephedrine-based cold medicines that can be used to make the illegal drug methamphetamine.

Nixon vetoed $16.5 million of federal stimulus funds for University of Missouri agricultural research centers around the state and put on hold $91.3 million of stimulus dollars for other college construction projects.

It marked the second setback for the college projects, which were to be funded with money from the Missouri Higher Education Loan Authority before the agency encountered financial problems.

The delayed projects include a $32.1 million replacement for the cancer hospital at the University of Missouri-Columbia. In recent weeks, state Sen. Kurt Schaefer, R-Columbia, has aired radio ads and made automated telephone calls urging his constituents to lobby the governor not to veto the project.

"Unfortunately, this only marks round one for the issue," Schaefer said Thursday. "We now call upon the governor to provide a timeline for when the funds will be released."

House Budget Committee chairman Allen Icet, R-Wildwood, also questioned the freeze on the university construction projects, suggesting they were exactly the kind the job-creating projects envisioned under the federal stimulus act.

Nixon imposed $60 million of expenditure restrictions on state agencies, contracts and grants. He said that includes the elimination of 200 state jobs on top of the 1,244 positions abolished in the budget passed by legislators.

Also placed on hold is $50 million for a new state incentive fund for high-tech battery makers, about $48 million in maintenance and repair for state building and a $21.5 million rate increase for in-home care providers. Various projects at veterans homes and state parks also were frozen.