Legislative Column for the Week of Monday, Jan. 20, 2013

State of the State

On Tuesday, the governor delivered his yearly State of the State address to the General Assembly. This speech is typically the kickoff to the budget process and gives lawmakers a good idea where the governor stands on issues the Legislature will address in the coming session. I always look forward to the State of the State because it helps legislators understand the governor’s priorities, even if he doesn’t go into great detail.

Missouri’s budget goes through a thorough process. Late in the calendar year, the administration, the House Budget Committee chairman and the Senate Appropriations Committee chairman agree on a Consensus Revenue Estimate (CRE). The CRE gives all parties a number on which to budget. Except this year, for the first time in a decade, the governor rejected the CRE and designed his budget $140 million higher than the General Assembly believes is reasonable. This is concerning because it is easy to promise more money to departments if you are using an artificially high revenue number. The other concern is that, if we underperform, it is the governor who gets to decide where to withhold dollars.

Much of the governor’s speech was devoted to education and increases to education funding. I agree with the governor that we need to increase funding for schools. I am happy to see that, after years of withholding money, the governor is committed to funding schools. I was disappointed that he proposed no offsetting cuts in other departments to show how he planned to pay for the increase. Unlike the federal government, Missouri is bound by our constitution to produce a fiscally responsible budget, and we have no treasury to print more money. As we increase funding to education by $278 million, there will need to be adjustments elsewhere, and it was unfortunate he didn’t lay out specific cuts in his speech.

In addition to the foundation formula increase, the governor proposed increases to higher education, scholarships and early childhood education. These are all areas he has cut previously, either in his budget or through withholdings, so it is good to see he has decided to start re-investing in our future. All told, his education spending will increase by almost half a billion dollars. That is a lot of money to spend with no offsetting cuts.

The governor continued to speak against an across-the-board tax cut for Missourians.  Instead, he emphasized the need for “targeted” tax cuts. While the governor talked about signing tax cut bills during his term, none of those actually changed the rate of taxation, which is the only fair way to do tax reform. By continually picking which “winners” get a tax break, the governor makes losers of everyone else. I will continue to seek a cut for all Missouri taxpayers.

I was disappointed that the governor only gave a passing line to two big issues we agree on: ethics reform and tax credit reform. I was glad to stand with the governor at a media conference in December to promote comprehensive ethics reform. I believe it should be a priority of the session and had hoped he would lay out his vision for how we could get something accomplished. I have also agreed with the governor for many years on the need for tax credit reform. Tax credits are robbing the budget of needed dollars for crucial programs. I expected he would elevate and take the lead on both issues, not relegate them to the back pages of his speech.