MISSOURI WATCH: FEDERAL DOLLARS FLOAT MISSOURI

A meeting the other day with the three most powerful members of the Missouri General Assembly produced this reaction to a critically needed balanced federal budget: Congress can stop Washington's red ink, with or without a constitutional amendment, by just rolling up its sleeves and getting to work on the job. It's as easy as that, according to Senate President Jim Mathewson, House Speaker Bob Griffen and Senate Minority Leader Franc Flotron.

Listening to these three gentlemen discuss the problem faced by their fellow legislators in Washington, one got the impression that if Mathewson, Griffen and Flotron were in charge of Congress, the budget would have been balanced a long time ago and, most assuredly, by this late date. America hasn't had an equal number for revenue and expenditures in a quarter of a century, and speaking for their colleagues in Jefferson City, these three leaders saw no reason why the federal government couldn't accomplish what the Missouri General Assembly does each and every year: balance outgo with income.

No one else does either.

Oh, there might be a minor hangup when it comes to dividing operating expenses from capital improvement in the two budgets. You see, Missouri lawmakers don't have to worry about including the cost of new buildings and major repairs on existing ones in the operating budget, which is the one that has to be balanced every 12 months. While Congress is forced to lump all of the extravagant building costs that are voted every year into one budget, legislators in Missouri can exclude them in a separate spending category, labeled capital improvements. These totals don't county when to come to deciding whether or not a budget is balanced.

Now, are you ready for this? If Missouri's capital improvements spending in the next fiscal year, which doesn't begin until July 1, were included in the operations budget, Missouri would be in the red for that year in the amount of $320 million.

If Congress were given this privilege, the budget deficit would be considerably smaller and certainly much closer to a balance than at this moment.

And what happens if a federal budget is balanced and Congress, following the advice of Mathewson, Griffen and Flotron, begins eliminating payments for "needless spending"? One of the first areas to be impacted would be in federal health programs, and one of the prime targets would be Medicaid. Since these are funds sent directly to the states, where they become a part of the services offered by social service agencies, the effect would be startling in Missouri and every other state. For example, in our own state, Uncle Sam furnishes $2.37 billion to the Missouri Department of Social Services, while the state's general revenue taxes contribute only $180 million. There's a big difference between what Missourians pay into welfare services and what is sent to Missouri from Washington. When Congress gets a Medicaid cold, Missouri recipients will most assuredly have a bad case of the flu.

Over at the Department of Mental Health, the reliance on federal waivers, and thus the receipt of millions and millions of U.S. dollars, is conveniently hidden, since in this case the federal funds are deposited into the state' general revenue account. This state agency has grown to become a social services traffic agency, receiving the bulk of its money from Washington and then transferring it to private service agencies who then make a profit from their care of the mentally ill and developmentally disabled. Over the years the state has downsized its direct-care operations to such a degree that it is probably a mistake to refer to it as a treatment agency.

If Congress every balances its budget and includes in its downsizing a sizable reduction in the Medicaid program, which it most assuredly must do, then Jefferson City will suddenly find itself with hundreds of private-care contracts that cannot be honored. More importantly, few in Jefferson City seem to be worried what happens to the thousands of small children, adults and geriatric patients who must depend solely on state care.

If Missouri is ever called on to begin state funding for the patients, there will no way in God's heaven for the General Assembly to balance its budget the next year.

Take a look at the extent to which Washington is currently funding state agency services and operations:

Federal funds for the Department of Elementary and Secondary Education total $457 million annually, compared to an allocation from the state general revenue fund of $540 million. DESE also gets money from other, separate funds.

Federal money for the Department of Natural Resources for the next fiscal year will total $56 million. The agency will receive only $9.8 million from the general revenue fund of the state, which is funded totally from Missouri-only taxes.

Federal funds coming in the next fiscal year to finance operations and programs of the Department of Economic Development will total $125.7 million, while money from the general revenue fund will total only $34.7 million.

The Department of Labor and Industrial Relations will receive $109 million from Washington in the fiscal year starting July 1, while the state's general revenue fund will expend only $3.2 million for this agency.

Even the state's elected officials will get a $10 million check from Washington, while their salaries and operational expenses will cost Missouri's general revenue fund $36.7 million.

If all or even some of these federal payments are ended, Missouri will have a fiscal crisis of monumental proportions, and taxpayers will not enjoy the consequences.

~Jack Stapleton is a Kennett columnist who keeps tabs on state government in Jefferson City.