The crisis awaiting Missouri

KENNETT, Mo. -- Like the dark chasms that hide Muslim terrorists from the rest of the world, Missourians will soon enough find themselves enveloped in a sea of darkness, confusion and fright as the Day of Judgment approaches in January when the governor of Missouri unveils the state's new budget.

Entire forests will be denuded to provide the newsprint consumed as reporters and politicians of all stripes weigh in for or against what will actually, though not technically, be Bob Holden's first start-from-scratch spending plan for the next fiscal year.

The truth is no governor starts from scratch when it comes to preparing Missouri's multibillion-dollar budgets. All spending entities that make up state government are permitted to use so-called core budgets, which in reality are ballpark totals, minus new frills and emergency funding, of what each agency spent in the preceding year for routine tasks, projects and programs.

Although there is considerable fudging in some of these core spending totals, they relieve agency fiscal officers of a large amount of work since, the argument goes, one can only reinvent the wheel one time.

Besides, the practice saves legislators on the lower end of the state fiscal learning curve a great deal of time when agency proponents explain that a budget request for "18 million beveled widgets" is a "core item" and has thereby been judged essential to the agency's operations over a long period of time.

The crisis Missouri is facing is really not difficult to understand. The current budget, totaling $19.3 billion, would seem more than adequate to anyone conversant with the state's fiscal condition only three or four years ago, when budget totals were closer to the $15 billion mark than today's $20 billion. The essential funding for the operating budget comes from the taxpayer-financed general revenue fund, which includes sales and use taxes and income-tax payments, all underwriting the state's 18 departments. The general revenue contribution to the current budget is more than $8 billion, which would be yet another surprise to anyone acquainted with tax-collection totals when they were at the $4 to $5 billion level.

So what's the big whoop in the face of all this state largesse?

The problem, dear taxpayer, is that Missouri has in recent years taken on high-priced programs with costs that are continually expanding, involving more and more citizens in assistance projects that have increasingly been regarded as good government, if one uses the term to apply to philanthropy and not fiscal integrity.

Putting it another way, Missouri appears to be committed to a large number of programs that, if discontinued or even maintained at their current levels, will be labeled as punitive, pejorative or just downright mean-spirited. It's a classic case of win-lose: The state has more money to spend, but it has an even greater number of projects waiting for its available cash.

Let's take the state's Managed Care Plus program, which was implemented in 1995 under the direction of the Department of Social Services. The expansion of this program through a waiver in July 1998 added an additional 64,662 children to Missouri's health-insurance rolls in addition to 135,550 children enrolled in regular Medicaid payments. By the end of this fiscal year next June 30, the state will have added another 1,200 children to the MC+ waiver program.

Skipping to the other end of public services where costs are not only expensive but expanding, Missouri's programs for the elderly are presently multimillion-dollar entitlements for those over the age of 60.

Health care for this group and persons with disabilities is becoming more and more expensive. These two groups make up only 23 percent of all Medicaid eligibility in the state but represent 71 percent of all health-care expenditures. Pharmacy expenditures in the state's Medicaid program have increased 373 percent from fiscal year 1993 through fiscal year 2001. Our senior citizens now make up 18.1 percent of Missouri's population and by the year 2025 will hit 26 percent.

State taxpayer obligations to fund Medicaid programs have also increased every year since their inception. The march of higher and higher costs can best be illustrated by the fact that state expenses for Medicaid have increased by an average of 16 percent each year over the past decade. These are programs that must be funded or the lives and well-being of recipients will be endangered -- and the state would face sanctions from Washington for any diminished funding role.

These and several other assistance programs have created a continuing crisis to meet their increased costs within virtually the same tax network that existed prior to their inception. But to realize how demanding these programs are, one need only follow the trail of money required from Missouri taxpayers: Ten years ago the state's Medicaid appropriations totaled $833 million -- and now reach $3.9 billion.

To see where this is going, note that 36.7 percent of all state spending this year goes for human services, including the Department of Social Services and some carried out by public and mental health agencies. Twenty-five percent of the state's operating budget goes to elementary and secondary schools. 6.6 percent to state colleges and universities, 4.9 percent to corrections and public safety, 2.5 percent for conservation and natural resources and all other state spending totaling 23.2 percent.

These percentages will change in the Holden budget in January, but rest assured the largest increase will be for public-assistance programs that seem unstoppable. Finding a balance is the task of the governor who must ultimately decide when these programs have burgeoned beyond Missouri's resources.

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