The Missouri House gave first-round approval Tuesday to a state operating budget that will close an almost $2 billion deficit by using almost all the state’s remaining surplus in the general revenue fund.
At the end of more than five hours of debate, there were few changes in the spending plan for fiscal 2027 approved earlier this month by the House Budget Committee. The 12 bills debated Tuesday total $50.3 billion, with $15.4 billion from general revenue.
Final votes will take place Thursday to send the budget to the state Senate.
The total is $1.7 billion less than Gov. Mike Kehoe proposed in January, with $422 million less general revenue. But the general revenue spending plan is $1.8 billion more than estimated tax collections in the year beginning July 1, with hundreds of millions in additional spending on construction and major maintenance needs yet to be brought up for a committee vote.
The budget plan massively overhauls higher education funding, cuts almost $52 million from child care subsidy payments from the budget Kehoe proposed and restores the governor’s proposed cuts to services for adults with developmental disabilities.
During debate, Democrats forced several roll call votes on the $60 million Kehoe sought to continue and expand the MOScholars voucher program. They lost on efforts to cut the entire amount, and to require schools accepting the money to “provide for a learning environment regardless of race, sex, ethnicity, religion or disability.”
That amendment, from state Rep. Betsy Fogle, a Democrat from Springfield, lost on a 45-83 vote on almost pure party lines after state Rep. Dirk Deaton of Seneca, the Republican chairman of the budget committee, said he opposed it.
“This is to make sure tax dollars don’t go to schools that openly discriminate,” said Fogle, the ranking Democrat on the House Budget Committee.
Deaton said he wanted to protect the right of religious schools to only accept students from families that adhere to the sect’s beliefs.
“It looks exclusive, at least in the sense of religion,” Deaton said. “By not discriminating based on religion, we are discriminating against religious schools for being religious.”
State Rep. Betsy Fogle, a Democrat from Springfield, speaks during the April 5 , 2023 debate in the Missouri House (Tim Bommel/Missouri House Communications).The daylong debate featured several other attempts by Democrats, all unsuccessful, to make major changes in the budget bills. Thirteen Republicans voted with Democrats in favor of Fogle’s amendment to take $51 million from interest accrued on money parked in the treasury for highway improvements to restore funding cut from day care payment programs.
Fogle also lost on an amendment to maintain plans to pay child care providers based on enrollment of children eligible for subsidies instead of the current system of payments based on attendance. The Department of Elementary and Secondary Education is prepared to shift to the new system in May, fulfilling a promise Kehoe made last year.
The extra cost is too much, Deaton said.
“Without adding significantly more dollars, we are not going to help as many kids if we pay on enrollment,” Deaton said.
House Republicans also defeated efforts to undo the massive overhaul of higher education funding Deaton wrote into the spending bill for state colleges and universities.
Instead of continuing the funding the schools received last year, Deaton pooled most of the money and redistributed it based on student numbers. Each community college would receive about $3,650 for each full-time equivalent and four-year universities would get about $8,400.
Truman State University in Kirksville would see its funding cut by more than half, to $23.8 million from $50.9 million. Harris-Stowe State University in St. Louis and Lincoln University in Jefferson City, historically Black universities and the four-year schools receiving the smallest current amounts, would each have their core funding cut by almost 40%.
State Rep. Ed Lewis, a Republican from Moberly, introduced, but withdrew, an amendment that would limit the cuts by putting only a portion of college funding in the pool.
“I don’t believe any of these institutions could survive that type of funding reduction in one year,” Lewis said.
An amendment from state Rep. Raychel Proudie, a Ferguson Democrat, to restore Kehoe’s proposal for flat funding in the coming year, failed on a party-line vote.
Delivering money based on student counts rewards schools that can retain the students they enroll to graduation, Deaton said.
“Maybe it is simple,” he said, “but I don’t think it is simplistic in all that it considers and understands.”
Current funding levels are based on past appropriations and reflect the political favors bestowed on individual campuses by past lawmakers, Deaton said.
“I don’t think there’s a person alive that can explain it to you, because it’s happened over 100+ years,” Deaton said.
Republicans had a generally easier path to get their amendments passed. State Rep. Mike Steinmeyer, a Republican from Sugar Creek, cut $2 million from state payments for the upkeep of Arrowhead Stadium. The Chiefs are leaving, he said, so the state can reduce its contribution.
The money instead will go to the Independence Fire Department.
“We are reallocating existing dollars to where they have a measurable impact today,” Steinmeyer said.
In the background of the budget this year is the looming fiscal cliff for state finances. Future budgets won’t have the cushion of a large surplus unless forecasts for declining revenue this year and sluggish growth in the future are incorrect.
The bank balance of the general revenue fund stood at $3.2 billion at the end of February. Kehoe’s budget anticipates a balance of $265 million on June 30, 2027, the end of the coming fiscal year.
Deaton has added about $400 million to that bottom line with the spending plan debated Tuesday. But future budgets won’t have the cushion of a large surplus unless forecasts for declining revenue this year and sluggish growth in the future are incorrect.
In an interview after the House debate, Deaton said he’s comfortable covering the deficit with surpluses accumulated in past years.
“I don’t think it’s appropriate that the government should have large balances, and we ought to be delivering services to people,” Deaton said.
Deaton, who is term limited, said he worked to reduce core spending to help future budgets.
“And there’s more work that will have to be done in that regard in future years, next year especially,” he said. “But I think by any measure, it’s a very responsible budget.”
In an interview, Fogle said she’s concerned about the state’s fiscal health. New federal policies that will shift costs for safety net programs to the state and Kehoe’s proposal to replace the state income tax with sales taxes, which has already passed in the House.
“The uncertainty wrapped around the income tax proposal by the governor concerns and worries me,” Fogle said. “It keeps me up at night about the future fiscal viability of the state of Missouri. You have to have revenue to pay your debts, and things that state government provides are very important.”
This article first appeared in The Missouri Independent.
