Friday, May 9, 2008

House Happenings for May 14th, 2008

Missouri’s General Assembly has passed the state budget, for FY 09, and sent it on to the Governor for his final consideration. There are several "happy faces" as well as several "frowns" concerning details of this year’s budget, which projects $22.4 billion in appropriations. The total of $22.4 billion is about $960 million (4.5 percent) above the current fiscal year, even though it is $500 million below Governor Blunt’s request. The legislature has still not been able to agree on the Governor’s plan for "Insure Missouri" and that would have accounted for about $350 million of those total differences between his request package and the final budget.
School funding programs will be increased by $121 million; however, that does not begin to satisfy problems that exist in school funding, especially in small and/or rural districts. There is no additional money for buses. That’s right; my understanding is there are no new monies for transportation. School funding is complex, partly because we are trying to function under guidelines of two funding formulas. The "new funding formula", passed in 2005, is to be phased in over a seven-year period. We are in year three of that plan, which incidentally set the value of "adequacy" at $6,117 per student, with no plan for inflation. I don’t have to tell you about inflationary costs of fuel, food, energy, etc. and our school districts have to face those pressures too. Allotments from the current portion of that new formula are supplemented by part of the "old formula" which had been in effect since the early 1990’s. That formula had been criticized, by some, as "being broken" but in reality it had not been fully funded in recent years. I believe it was only funded at 81 percent to 85 percent since I’ve been in the legislature and fixing that shortfall could have alleviated many of the problems in small schools, even helping our teacher pay issue. Finally, the new $121 million is the amount required to meet the third step of the new formula portion. It does nothing to help the existing deficits from before and nothing for additional increases in operational costs. There were modest increases for state institutions of higher education, but $49 million, which is most of the new money, is included in a scholarship program, known as "Access Missouri". This has been a successful program, but some of us are concerned that program modifications now include students whose families earn up to $200,000 annual income. In addition, the scholarships are significantly higher for students attending private colleges than for those in public colleges.
State employees will receive a three percent pay increase. Our plans in the House of Representatives were to divide new money evenly among all employees, which would have given everyone $1,056. Our conference committee members failed to "hold our position" when meeting with their Senate counterparts so now most will get about $600-$700 and some will get $2500-$3000. They all buy gas at the same pump, groceries in the same store, etc. etc. but that’s tradition and we’ll continue to see frowns and smiles among state workers.
There are funding increases for nursing homes that will bring average daily payment to $126 per patient, which had been about $120 per day. Medicaid payments to most providers will increase by about seven percent; however, nothing really changed to improve eligibility problems for more individuals.
There are numerous other details, but I want to close by mentioning the concern about available revenue. This budget includes spending increases of 5.4 percent with revenue increases expected to rise by only 3.4 percent. We are starting the year with a sizeable balance which resulted from FY 07 and FY 08 when revenues exceeded expenditures. Keep in mind the budget is based on "projected revenue" and there are many factors which could cause serious complications.

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