In Governor Nixon’s over-reaction to the revenue shortfall, he has closed seven tax-assistance offices across the state. These offices assisted both individuals and businesses with their tax needs and questions. One of the seven offices to be closed is the Joplin office where five employees have already received their pink slips, effective July 1. Furthermore, Governor Nixon’s cuts have affected perhaps as many as 260 more state workers by his closing of nineteen regional state offices for the Department of Revenue (DOR) and the Department of Natural Resources (DNR). The Neosho DNR office that provides services for both Newton and McDonald Counties is one of the offices to be closed. Several mental health workers will also see their jobs ending. Of the people who will be losing their jobs, some are career employees, several with over twenty years experience; others are within months of retirement.
Governor Nixon has either vetoed or withheld the increases or the new money that the General Assembly has appropriated. For example, the increase of $100 million to K-12 public education for Foundation Formula funding is being withheld. This is not the almost $3 billion that is appropriated for elementary and secondary education. The $43 million of new money that was appropriated for higher education, along with $6 million in new money for community colleges is also being withheld, not the existing funding. With all the political wrangling it makes it extremely difficult, if not impossible, for school superintendents, university and community college presidents and board members to develop a new budget for their institutions.
Personally, I believe a more responsible approach to this situation would be to withhold—not veto—some funds in the budgeted items. This way, if state revenues do pick up, the items that were withheld could be immediately reinstated and not totally lost to a line item veto. Then once we get into the new fiscal year that begins July 1, 2014 and the governor has reason to believe that revenue will not equal expenditures, at that time he could make additional withholdings. It is hard to believe the governor has taken the action that he has before the new fiscal year has even begun and we do not have exact figures of incoming revenue but are still working with estimated figures.
When the budgeting process began last December, both the governor and the budget chairmen tried to come up with a workable figure from which to start the process. The problem was that neither the governor nor the chairmen could agree on the consensus revenue estimate, the figure from which they begin the budgeting process. Governor Nixon’s revenue estimate was a full percentage point higher than the budget chairmen’s estimate. Though both figures ultimately proved to be too high, in the final analysis the budget chairmen’s figures were closer to the actual numbers, as revenues grew at a slower rate than either expected. Because of the slow revenue growth in our state, some withholdings were anticipated.
The ten “tax break bills, ” or as the governor refers to them as “giveaway bills to special interest groups in the form of tax breaks,” have created the current conflict. Some of these “special interest groups” are really just small struggling businesses, several of which are being double-taxed. They are not “giveaways,” as the governor implies. He thinks that these bills will reduce the availability of funds for the budget year FY15, while the budget chairmen believe that any impact on the availability of money for the budget will not go into effect until the FY16 budget—if at all. On the bills’ fiscal notes (what they will cost if they become law), the governor has always used the highest possible figures and then inflated the numbers; in other words, he has always looked for the worst-case scenario.
From my perspective, I believe Governor Nixon has over-played the effects that these bills will have on our state’s revenue. No matter how one looks at it, though, it appears that the stage is now set for September’s Veto Session.