Nursing home suit goes forward against Holden

JEFFERSON CITY, Mo. -- A lawsuit challenging Gov. Bob Holden's $20.7 million cut to nursing homes will move forward but won't stop the state from spending the money on other things.

After a brief hearing Friday, Cole County Circuit Judge Thomas Brown issued a temporary restraining order preserving the appropriation authority for the money in case nursing homes later win their case.

Spending authority typically expires with the fiscal year, which ends June 30.

Regardless of whether the appropriation authority for nursing homes exists, the money will not be set aside.

"There won't be any money there on June 30. We're going to spend it all," said assistant attorney general Chuck Hatfield, who is representing the governor's office. "We're going to give it to higher education. We're going to give it in tax refunds," which have been delayed because of state budget troubles.

Holden spokesman Jerry Nachtigal said that did not mean Holden was releasing the $83 million he withheld from public colleges and universities at the same time he announced the nursing home cuts. Higher education institutions have not sued.

Holden withheld a total of $230 million in appropriations in May to help balance the budget this fiscal year.

The nursing home industry is challenging Holden's authority to withhold its money and use it for other purposes. The lawsuit also asks that the money be paid to nursing homes.

Brown tentatively set a July 31 hearing on whether to grant a permanent injunction on the nursing homes' request. But the hearing could occur sooner if parties can agree to the facts in the case.

Friday's order could ensure nursing homes quicker access to state money, instead of having to wait for a new appropriation, if nursing homes win the lawsuit, said attorney Harvey Tettlebaum, who represents the Missouri Health Care Association and several individual nursing homes that filed suit.

If nursing homes win, Hatfield said, the state still believes the money might have to be reappropriated by the Legislature. But he said there is little chance that the state will lose.