JEFFERSON CITY • Universities would take a 7 percent hit, state government would eliminate 863 jobs, public schools would sign on to an accounting gimmick and tax scofflaws would get a second chance.
Those are a few of the ways Gov. Jay Nixon proposed Wednesday to balance next year's $23.2 billion state operating budget without raising taxes.
The governor, who styles himself as the state's cheerleader-in-chief, used his State of the State speech in a packed House chamber Wednesday night to accent the positive.
Noting that new unemployment claims are down and state revenue is on the upswing after two years of sharp declines, Nixon said Missouri's economy had "turned the corner" and was poised for growth.
"By fighting every day for every job, we are turning this economy around," Nixon declared.
However, more spending cuts are needed in the budget year that begins July 1 because Missouri has been patching its budget hole with federal stimulus funds, and they are drying up.
Nixon's proposal would make permanent about $270 million that he cut from this year's budget and chop about $300 million more.
One of the most painful reductions: a 7 percent cut, or $63.8 million, in aid to four-year colleges and universities and community colleges and technical schools. The schools are considering tuition increases to offset the cuts.
"We're anticipating that those tuition hikes won't be significant," said Linda Luebbering, Nixon's budget director.
Nixon contended that he was preserving this year's level of funding - about $3 billion - in aid to elementary and secondary schools, but that promise is contingent on an accounting maneuver.
The governor wants schools to hold onto $112 million in extra federal stimulus funding they are slated to receive this spring. Then schools would get that much less in the 2011-12 school year.
Still, the budget would fall short of fully funding the school distribution formula as legislators envisioned when they approved it in 2005.
Lt. Gov. Peter Kinder, who will likely challenge Nixon for the governorship in 2012, gave the Republican response to Nixon's speech. Kinder sharply criticized the governor for everything from Nixon's staff's salaries to his travel expenses to his hesitance to speak with the press.
But he agreed with Nixon's stance to balance the budget without raising taxes.
"When Missourians are struggling, we shouldn't be asking for more of your hard-earned money," Kinder said.
Nixon and legislative budget leaders have projected that state general revenue will grow by 4 percent in the next fiscal year. General revenue comes mainly from state income and sales taxes and is the main pot of money the Legislature controls. The rest of the budget comes from federal and earmarked funds.
But even with the uptick, the state expects to take in less next year than it did four years earlier - $7.3 billion in 2012 compared to $8 billion in 2008.
Overall, Nixon, a Democrat who plans to seek re-election next year, said that since he took office in January 2009, he has reduced spending by more than $1.8 billion and cut more than 3,300 government jobs.
"These decisions are never easy, but they are necessary," he said.
Next year's budget would lop off an additional 863 state jobs, including 432 in the department of mental health, 381 in social services and 105 in corrections.
Luebbering, Nixon's budget director, said some of the savings would stem from downsizing mental health facilities and consolidating offices that determine eligibility for food stamps and Medicaid. Many of the cuts can be achieved through attrition, she said.
"We're hoping as much as possible to avoid layoffs," Luebbering said.
She said the governor's budget preserves or increases funding for his top priorities such as job training, college scholarships and school buses.
For example, school districts would receive $97.8 million for school transportation, a $7.5 million increase over what they got this year.
And Nixon continued his push to broaden a college scholarship program known as A-plus, which provides two years of tuition to qualified high school students.
Currently, only high schools that revamped their curriculum to meet certain criteria are in the program. Under Nixon's proposal, the scholarships would be available to students at all high schools.
However, to keep the price tag down to $1 million, the new schools could give the grants only to students from low- to moderate-income families - those with under $55,000 in household income.
A few of Nixon's budget recommendations involve raising revenue and are contingent on the passage of legislation.
For example, he is counting on $20 million from a tax amnesty program. Luebbering said the state would let people with delinquent taxes pay half of the interest owed in exchange for coming forward and settling their tax debts.
Nixon also wants the Legislature to give serious consideration to a plan to scale back tax credits. His budget relies on $4.5 million in savings from eliminating five tax credits, including one for film producers, and lowering the cap on historic preservation tax credits to $75 million a year.
Legislators have balked at those changes, and Nixon's speech avoided much discussion of it. Instead, he focused on common values, such as creating jobs.
Senate President Pro Tem Rob Mayer and other Republicans said they wish Nixon would have included more specifics in his speech about how he planned to balance the budget.
"I thought he was short on specifics," Mayer said. The Senate leader said he'll need to check the governor's specific budget proposals to see if the budget is truly balanced, but he questioned some of Nixon's proposed savings.
"A lot of this is a shell game," Mayer said, noting that some of the increased revenue Nixon proposes would need legislative changes that are unpopular, including changes to some tax credit programs and a debt collection proposal.
State Rep. John Diehl, R-Town and Country, offered similar criticism.
"We have to make sure these are real cuts, not just paper cuts," he said.
Still, Mayer "applauded" the governor for planning an increase to college scholarships and seeking to keep K-12 education funding level.
House minority leader Mike Talboy, D-Kansas City, said Nixon gave a "good speech."
"In a year like this you have to go back to basics and that's what he did in his speech," Talboy said.
Nixon called for one change that the GOP majority has shot down in the past: limits on campaign contributions. "Right now, anyone can write a check for any amount of money, and tip the balance of an election," Nixon said. "That is corrosive to our democracy."
The most robust bipartisan applause from the Republican-dominated chamber came near the end of the speech when Nixon pointed to the state's status as a home to a couple of manufacturing icons.
"We want a vibrant and prosperous economy, where ‘Made in America' is still the gold standard - whether it's stamped on an F-150 or an F-15. And we make them both, right here in the Show-Me State."
Nixon also pointed to the news this week of Ford keeping 3,750 jobs at its Claycomo plant and he highlighted his support for a new nuclear reactor in Callaway County, a proposal that could lead to thousands of construction jobs in the next decade.
"Cynics don't build things," Nixon said. "Optimists do."
"Building a second nuclear plant will create thousands of good-paying jobs for all our construction trades," he continued. "They built Callaway One. And they will build Callaway Two."
In his speech, Nixon said the state was in good shape because of past fiscal management, and he pointed to the huge deficits facing other states to highlight the relative lack of difficulty he suggested the Legislature should face this year in finding around $300 million in spending cuts.
Nixon even suggested lawmakers will be able to add money to some areas of the budget, including his Caring for Missourians program that helps increase health care training in colleges and universities.
The governor continued his pledge to not raise taxes and gave a salute to military veterans.
He started on a somber note, mentioning the tragic shooting at an Arizona congresswoman's community gathering that killed six people, but Nixon mostly stuck to upbeat themes, saying more than once that he would fight every day for jobs in the state.
"Every job we add matters," Nixon said.
