MISSOURI WATCH: CLOUDS IN THE EAST

I believe it was that wise native Missouri philosopher, Yogi Berra, who once said, "The only time we really need prosperity is in tough times." Well, as revenue reports indicate, state government in Missouri is currently enjoying an abundance of prosperity, with tax collections at new records almost every month, and nary a word of bad times crossing the lips of elected officials in the City of Jefferson.

Far be it from me to throw cold water on prosperity, but to be perfectly candid, those Missourians who view it as a permanent climate in our state have either forgotten the events of the last decade or are unaware of what lies ahead for state budgets within a very short period of time. Heaven forbid that they have forgotten both of these facts.

The other day a friend who labors in a congressional budget office in Washington expressed concern about how his native state would handle the drastic reductions in funding that were in store for federal assistance programs.

"Does anyone back there have any idea about how deep all federal funding for state mandates will be cut?" he asked in a tone more accusative than inquisitive. Venturing a weak defense of politicians who might be as ignorant of impending reductions as I was, I answered that no one, including all those geniuses in the District of Columbia, seemed to know the answer to his question. "Well, at least they know they will be substantial," my CBO source shot back.

He had me there. Until then I had given little thought to the rainy days that even our nation's ever-concerned chief executive had earlier mentioned in passing, and I figured if Bill Clinton is worried, even as he is taking credit for a bipartisan effort to balance the federal budget, there must be something to all of this bureaucratic concern.

My ulcer-driven CBO friend raises a point certainly worth noting in Jefferson City. There are some clouds gathering here and there that bear watching, much like my father who never failed to go outside to inspect for tornadoes and cyclones when the weather turned ugly or Northwest Missouri breezes turned to brisk winds. Like CBO officials in Washington, he had had some rather unpleasant experiences with unexpected storms, and didn't like being unprepared.

After my Washington visit, I discussed our state's financial condition with the best-informed fiscal experts in Jefferson City, officials of the Office of Budget & Planning. These educated and experienced young men are simply superb, and they are religiously careful to express neither undue optimism nor undue pessimism about Missouri's finances. Yes, there was a problem to contend with as federal funding for programs is reduced; yes, these reductions haven't been felt in Missouri and, yes, the smaller checks are expected in a couple of fiscal years. But the "Money Marks," as I call Budget Director Mark Ward and Assistant Director Mark Reading, have no crystal balls that can bring up exact numbers -- and neither do the money men in D.C. They all recognize that if the federal budget is going to be balanced by the year 2002, a lot of federal checks will have to be reduced, and this includes virtually every program now carried out by the Department of Social Services and numerous ones sponsored by the departments of Mental Health and Health, to mention but three of the 16 agencies affected.

Although this fact is seldom if ever mentioned, the largest single item in Missouri's current $14.7 billion budget is Medicaid, which was reduced from a requested $2.9 billion to $2.8 billion for Fiscal Year 1998, and which represents 65 percent of the total expenditures of the Department of Social Services. This agency spends nearly $1 billion a year more than is appropriated for all public school districts in Missouri.

Let's put this in some perspective, right away, for if Medicaid is a budgetary target in Washington, its effects will be dramatic in a state where this single program accounts for nearly two out of every three dollars spent for social services and where this single agency's budget represents 30 percent of all state spending. The situation becomes even more dangerous with realization that the feds supply three dollars for every dollar from general revenue collections for the Social Services department.

If Washington cuts even $1 from its check to Missouri, someone will have to make up the difference. If it cuts as much as 10 percent, existing programs across the state will be severely reduced. If the percentage goes even higher, than someone will surely be shouting May Day! And when -- not if -- reductions must be made for public health services, such as AIDS relief, and mental health services, such as care for the mentally retarded, and highway funding, thereby impacting the beleaguered 15-Year Road Plan, then a State of Emergency will no doubt be sounded in the State of Missouri.

The situation can become even worse. For example, virtually all of funds now spent for treatment of alcoholism and drug abuse come from Uncle Sam. So does a large portion of the money spent by the Department of Public Safety. So does a substantial portion spent by the Department of Labor and Industrial Relations. Combine all of these agencies and you can recognize the validity of my calculations showing the federal government supporting 27 percent of all services, programs and activities within our state .

Federal money has permitted public officials in Jefferson City to claim credit for programs they neither originated nor funded. It has been a great con game in this and every other state, but it's about to end. The federal money is quickly drying up, creating crises yet undreamed of in Jefferson City and every other state capital in the country.

Yogi was right. Missouri is soon going to need all the prosperity it can lay its hands on.

~Jack Stapleton of Kennett is the editor of Missouri News and Editorial Service.