West County Democrats

So it begins.

On his first Monday in office (interestingly, while state government was closed), Missouri Governor Eric Greitens announced $146.4 million in cuts to the current fiscal year budget.  Of course, his social media video [https://www.facebook.com/EricGreitens/ ] lays blame at the feet of his unnamed predecessor, Governor Jay Nixon: Governor Seal omits mentioning that the big guy had already slashed around $200 million from the current budget, and, had taken the Exacto knife to every budget each year while he served.

Also omitted from the video and the press release                                            [https://governor.mo.gov/news/archive/governor-greitens-takes-first-steps-balance-missouri%E2%80%99s-unbalanced-budget ] is critical context.  All these cuts come from the 29% of the state budget funded by Missouri-generated General Revenue.  Most of Missouri’s budget money comes from Uncle Sam in funds dedicated for everything from Interstate Highways to food stamps to the National Guard.  That $146.4 million comes from around $8 billion in GR, not from the $28 billion total budget.

In Monday’s press release the governor states, “I do not believe the answer to unwise budgeting is to raise taxes on hardworking families who are struggling just to make it by.  The answer is simple: government must become more efficient, and we must build a thriving economy with more jobs and higher pay.”

I see two problems here:  1) Governor Seal does not understand how Missouri government collects taxes, and, 2) he does not have a plan to lead.

Back when the new governor was about six years old Missouri voters enacted the Hancock Amendment.  Basically, our state redefined stupid.  Oh, not in the way it caps tax revenues but in the requirement that “excess” revenue had to be almost immediately returned to individuals who filed tax returns.  That prevents Missouri from putting away money for a rainy day or stockpiling funds for major projects. 

The Hancock Amendment also convinced Missourians that the state had plenty of money – bureaucrats and elected officials just had to “become more efficient.”  So, 37 years later we have embarrassingly low taxes on cigarettes and beer, inadequate targeted revenue for transportation, and, the lowest paid state workers in America.  In recent years Missouri has dramatically reduced revenue by lowering taxes on businesses and exempting more activities from paying any taxes.   (For example, you pay sales tax on a new $30,000 pick-up truck but not on a $120,000 semi tractor.)   That bad situation is still being made worse by Republican lawmakers who have proposed new tax breaks and tax reductions in this legislative session. 

Remember that old saying, when you realize you’re in a hole stop digging?  Missouri’s majority party likes to keep digging.  The current goal of Missouri government is not to provide services to the citizens, but, to reduce the money collected to provide services.

That gets to my second point, leadership.

As you know, I spent my career running non-profit organizations.  Joint Neighborhood Ministry and Circle Of Concern exist because the work they do is critical to their communities.   Yes, at times the bank account got light.  And, with money tight the obvious answer is to reduce services.  That’s also the wrong answer.

If the service is needed it is needed.  The organization exists to help people.   If they are not helped they suffer.  When times are lean the leader must work harder to create support for the mission, to raise more money to continue the mission.  As the former head of a charity, the governor ought to understand that reality.

Imagine if, back in his SEAL days, Eric Greitens was told by a general that they had a mission.  A careful review showed that the plan needed a Blackhawk helicopter full of SEALs and an Apache attack ship to provide cover.  But the budget is tight, so, take one other guy with you in a Humvee and go get this done.  And, remember, bullets cost money.  Would a competent SEAL commander follow that order or would he insist on the right crew and equipment for the job?

Yet, Governor Seal begins his service to 6 million Missourians by ignoring what is needed to keep the state government’s essential services operating.  He has already took reasonable efforts to increase revenue off the table.  He repeats the vague GOP promise – the ghost of Reagan era supply side economics – that “we must build a thriving economy with more jobs and higher pay.”

Duh!

Does the new governor really believe that Jay Nixon and all the other Missouri governors before him didn’t also want to build the economy and raise wages?   No governor in America (well, maybe in Kansas) has ever proclaimed that they want to make their state poorer!  Pushing for economic development is item #1 on every governor’s agenda.

Yet, please don’t forget that Governor Seal has promised to sign Right To Work and anti-prevailing wage legislation as soon as they get to his desk, bills which will reduces wages in the state and probably won’t create any new jobs.  Instead of leading the effort for a more prosperous Missouri, he’s planning on digging that hole even deeper.

What else can we expect?

Well, Missouri tax revenue continues to increase at 40% of the rate required by the current budget.  Despite cuts by Nixon and Greitens, another $150 million or so will most likely need to be trimmed from the budget for the fourth quarter of the fiscal year (April, May and June).  That means total cuts of about $500 million from the budget approved last May.

The new governor and the House budget chair (Scott Fitzpatrick, R – Shell Knob) agree that the FY2018 budget needs to come-in around $450 million below FY2017.  Again, that decline is all from General Revenue’s slice of the budget.  And, it is probable that the cuts will have to be deeper because this legislative session the majority party members have proposed several hundred million dollars in new tax cuts – and no revenue enhancements!

This go around the governor spared K – 12 education by chopping off part of the core allocations to community and four year colleges.  As the cuts continue he won’t be able to save the state’s public schools.  Later this fiscal year and next he will have to whack $200 million to $400 million in Foundation Formula (core) funds.  Oh, he can take more from colleges and mental health and other state departments but the structure of the budget will leave him no choice.  He will have to reduce basic school support.

Eric Greitens is in the perfect position to be the governor who starved Missouri classrooms to death.

Stay tuned.

Submitted by Glenn Koenen, WCD Member