Jay Nixon proposes sweeping cuts, consolidations

Mar 13, 2010 — St. Louis Post-Dispatch

Tony Messenger

Mar. 12, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- SPRINGFIELD, Mo. -- In outlining sweeping changes to Missouri's government Thursday, Gov. Jay Nixon begged the forgiveness of the state's most famous son, former President Harry Truman.

To help solve the state's growing budget crisis, Nixon proposed consolidating four government departments into two, cutting 1,000 state jobs, privatizing some services, selling 2,000 state-owned cars and no longer giving state employees certain holidays off -- including Truman's birthday.

"As one fiscally conservative Democrat to another, Harry, I hope you understand," Nixon said.

In a speech to Springfield business leaders Thursday, Nixon announced actual cuts totaling $126 million from the current year's state budget. But the big changes he proposed would affect next year's budget, when the governor and lawmakers will have to agree on an additional $500 million in cuts.

"To get the savings that we need, we must right-size government," Nixon said.

Among the biggest of Nixon's ideas are consolidating the state's two education departments, consolidation of the Missouri Highway Patrol and Water Patrol, and turning over collection of child support to private industry. The governor also suggested that Missouri's tax credit programs -- popular tools used as economic development incentives -- need to be reined in. That's an idea that has been championed for the last couple years by Sen. Jason Crowell, R-Cape Girardeau.

Nixon suggested that some tax credit programs should be capped and others eliminated if they aren't producing a "return on investment." The state's tax credit programs have grown fast in the last decade, to more than $570 million in the current fiscal year.

Nixon said he expected to talk to Crowell about his proposals soon. Crowell has promised to hold up various economic development bills in the Legislature this year if his bills to rein in various tax credits don't advance.

"I appreciate the bipartisan manner in which the governor is seeking to have a thoughtful discussion about making government live within its means," Crowell said in response to Nixon's proposal.

Missouri's budget problem is mostly one of decreased revenue caused by higher unemployment, which has resulted in reduced individual and corporate income tax returns. The state's revenue is 12.7 percent behind last year's pace. In total, Nixon has cut more than $850 million in spending for the existing fiscal year, which ends in June.

The $126 million of budget reductions announced Thursday include: -- The elimination of in-home care services, such as bathing and cleaning, effective April 1, for 2,600 lower-income elderly or disabled people.

-- Reduced state aid for public school buses and community health care clinics.

-- A $1.1 million cut in state subsidies to Amtrak, which recently has increased its ridership on Missouri's twice daily trains between St. Louis and Kansas City. The cut would force the elimination of one of those trains, unless the Missouri Department of Transportation comes up with money from elsewhere or negotiates with Amtrak to accept less.

While Nixon conceded that his "blueprint" for cutting government services won't get the state all the way to the $500 million that needs to be cut for 2011, he suggested that the changes were a necessary first step. He called it "the right plan for the right time."

The administration said it had not calculated how much money the steps would save.

At least one Republican, Sen. Gary Nodler, R-Joplin, offered support for the consolidations of departments. Nodler, former budget chairman in the Senate, was at Nixon's speech in Springfield.

"There are some good ideas here," Nodler said. "But they will not reach $500 million."

Nixon said he would be meeting with lawmakers in coming days to discuss his proposals. While he can achieve some saving using executive orders, he will need legislative approval for the biggest ideas, such as cutting private school scholarship aid and consolidating departments. Both houses of the Legislature are controlled by Republicans.

Nodler suggested that the scholarship proposal would "meet stiff resistance."

House Budget Committee Chairman Rep. Allen Icet, R-Wildwood, said he believed Nixon was still "trimming around the edges" at the budget. Icet said he wanted to see Nixon propose wholesale cuts to state programs.

Asked which ones he would cut, Icet said, "The proverbial ball is in the governor's court."

The state's fiscal condition would be worse if not for about $2 billion in budget stabilization money provided by the federal stimulus bill in 2009. That money was split between the 2009 and 2010 budgets by Nixon and the Legislature, warding off what would have been steeper cuts to education and other government services.

Nixon's idea of merging the state's two education departments is sure to attract a lot of debate in the Legislature. It would merge a very small department with a very large one: The Department of Elementary and Secondary Education has 1,746 staffers. The Department of Higher Education has 76 staffers, half of whom are paid for with federal money to administer student loans.

Representatives of each said leaders are open to the concept.

"We're amenable," said Jim Morris, spokesman for the Department of Elementary and Secondary Education. "We're happy to work it out."

When the department was created, in the mid-1970s, it oversaw community colleges, but not four-year schools. Leaders said they could not remember any serious discussion about a merger before now.

At risk are the two boards, appointed to govern each department, the two commissioners appointed by the boards to run the departments and certain administrative expenses, such as fleet services, equipment, research and data analysis, that may serve duplicate functions.

Other positions would be more difficult to trim. The Department of Higher Education's academic affairs unit clearly doesn't track K-12 education, for instance, and would be "a little out of their league" on the issue, said spokeswoman Kathy Love.

But both sides also said there has been much recent discussion about a preschool-through-graduate-school approach. Higher education Commissioner Robert B. Stein said the concept is growing across the nation.

David Hunn of the Post-Dispatch along with The Associated Press contributed to this report.

Newstex ID: KRTB-0187-42849960