Opinion: Making sense of Missouri’s looming budget cliff

Missouri’s legislature is facing one of the greater budget precipices I’ve covered in some five decades.

The magnitude of the budget crisis was demonstrated by Gov. Eric Greitens when he unveiled his spending plans. It includes the largest percentage cut in state funds for public higher education in more than a quarter century – a 10.8 percent cut in the prior-year appropriation.

Further, in this current budget year that runs until June 30, the state will not have enough cash to pay your tax refunds on time.

So rather than delaying tax refunds until next summer or cutting funds from other agencies to pay your refunds, Greitens’ budget proposes borrowing more than $250 million from private lenders to pay your refunds on time.

That would kick the cost of tax refunds into the next year when those loans will have to be repaid.

The budget calamity facing Missouri is so bad the governor had to engage in a bit of financial fantasy to put a rosy face to his budget.

He proposed $163 million in new funding for state highway construction and maintenance.

But the state Department of Transportation is funded primarily from dedicated funds – like the gasoline tax – over which the Constitution gives the governor and the legislature little control.

The governor’s budget already has come under attack from legislative Republicans.

Just hours after the governor’s budget announcement, the Senate’s appropriations chairperson voiced concerns about the proposed higher education cuts.

Greitens’ plan to borrow money for prompt payment of tax returns raised immediate concerns about Missouri’s constitutional ban on the legislature authorizing loans to fund budget obligations.

“We’re probably not going to do this, I think,” proclaimed House Budget Committee Chairman Scott Fitzpatrick, R-Shell Knob.

Just think of the financial turmoil in Illinois and California to understand the wisdom of the authors of Missouri’s Constitution banning deficit spending.

In his defense, the budget problems Greitens now faces are, in part, the result of earlier Republican-controlled legislative sessions that passed business and other tax cuts despite warnings about the long-term financial consequences.

In response, tax-cut proponents argued the cuts would spur economic growth to generate more tax revenue.

But that has not happened to the degree promised by supporters – despite a rebounding economy.

At the start of this year’s legislative session, Senate President Pro Tem Ron Richard, R-Joplin, warned of the damage to the state from any new large tax cuts. Later, a legislative budget leader expressed concerns about past tax cuts.

The answer to Missouri’s current budget woes won’t come from the politically easy proposals like improving efficiency. Reducing paper clip purchases will not resolve the budget cliff Missouri now faces.

The alternative of raising taxes would seem unlikely in an election year. Besides, any significant tax increase would require statewide voter approval.

So, what about restructuring government in ways that truly reduce costs?

What about consolidating the more than 500 separate school districts to lower the cost of education administration?

What about consolidating the various competing higher education institutions? That could reduce both duplication and administrative costs.

What about returning to counties rural roads the state maintains that really are not part of the statewide highway system?

What about consolidating the departments of Social Services, Health and Mental Health to reduce administrative overhead for an array of family, medical, nutritional and well-being programs?

If the vision for welfare is a pathway to work, why not consolidate welfare programs with the Labor Department, as one Senate democratic leader proposed years ago?

These are not the kind of structural ideas I’m hearing from our state leaders to provide long-term solutions to the state’s budget realities.

Instead, so far, it strikes me this could be another year when the budget problem again is kicked down the road.

Phill Brooks is director of the Missouri School of Journalism’s State Government Reporting Program. He has been a statehouse reporter since 1970, making him the dean of the Missouri statehouse press corps, and he manages the multimedia website on state government news, MDN.org. Brooks can be reached at column@mdn.org.