State treasurer claims auditor 'dishonest' about adequacy of state's reserve fund

State Treasurer Scott Fitzpatrick accused state Auditor Nicole Galloway of being "dishonest" Friday in alleging the state isn't saving enough money to avoid having to cut spending or raise taxes if there is a recession.

During a visit to VIP Industries in Cape Girardeau to tout National Disability Employee Awareness Month, Fitzpatrick, a Republican, said the state's in good shape financially.

"I think she doesn't really understand how the rainy day fund works," Fitzpatrick said of the Democratic state auditor.

"We are one of just a handful of states that have a AAA credit rating from all three credit agencies in the country," he told reporters. "One of the reasons cited for that AAA credit rating is the strength of our budget reserve fund."

Fitzpatrick said the fund "is being run exactly like the (state) constitution says it should be run."

Galloway said Tuesday, "Missouri is woefully unprepared for an economic downturn."

The auditor is seeking the Democratic nomination to challenge Republican Gov. Mike Parson in the 2020 election, though the audit report was released this week in her official capacity.

A constitutional amendment adopted by voters in 2000 limits Missouri's reserve fund to 7.5% of net general revenue, or 10% if lawmakers approve a special appropriation for it, which they have not done.

As a result of the cap, Missouri started the 2020 fiscal year in July with $642 million in the reserve fund. Missouri's total state operating budget is $29.7 billion.

Fitzpatrick said it is important to have both a healthy reserve fund and a general revenue fund. The balance in the general revenue fund has increased by about $500 million, from $100 million in fiscal 2014 to about $600 million last year, he said.

The state treasurer described Galloway's audit as "political in nature." He said her audit was "irresponsible" because it could cast doubt on the state's financial standing.

As part of his visit to VIP's sheltered workshop, Fitzpatrick outlined the benefits of Missouri's MO ABLE program, which is administered by the state treasurer's office.

The program allows Missourians with disabilities to save money without losing access to federal benefits such as Medicaid, he said.

With some 1,100 ABLE accounts, Missouri has one of the largest program in the nation, according to the treasurer. "It can be used kind of like a checking account for people with disabilities," he said

After touring the VIP sheltered workshop and meeting with employees, Fitzpatrick talked about his office's efforts to return unclaimed property.

Each year, banks, businesses, government agencies and other organizations turn over unclaimed cash and contents of safe deposit boxes to the treasurer's office.

"We get $100 million in unclaimed property every year," he told reporters. "Last fiscal year, we paid out about $45 million, which is a record. But we are still taking in about twice as much as we are paying out."

The treasurer's office has $1 billion in unclaimed property in more than 5 million owner accounts, according to the department's website

Fitzpatrick said state government recently established an automated system, which compares the unclaimed property list with a list of those who owe child support.

The program has generated over $2 million in payments to families owed child support by people who had unclaimed property in the treasurer's office, he said.

"We will continue to look at creative things to do to return unclaimed property," he said.

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