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Analysis: Nixon’s Budget Depends On New Revenues

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Missouri Governor Jay Nixon (C) delivers the State of the State address while Missour Lt. Governor Peter Kinder (R) and House Speaker Steve Tilley listen at the State Capitol in Jefferson City, Missouri on January 17, 2012. UPI/Bill Greenblatt

Missouri Governor Jay Nixon (C) delivers the State of the State address while Missour Lt. Governor Peter Kinder (R) and House Speaker Steve Tilley listen at the State Capitol in Jefferson City, Missouri on January 17, 2012. UPI/Bill Greenblatt

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JEFFERSON CITY, Mo. (AP) - When delivering his State of the State address, Missouri Gov. Jay Nixon made sure to highlight that his nearly $23 billion proposed budget requires no new taxes. But it does depend on Missouri taking in tens of millions of dollars in new revenues some of which can happen only if legislators change state law.

For Nixon’s budget to be balanced, Missouri lawmakers must create an amnesty period intended to entice tax scofflaws to pay up.

They must authorize the federal government to siphon money from vendors with debts to Missouri.

They must expand a state license ban for professionals and businesses that haven’t paid state taxes.

They must agree to sweep money from a fund of the Missouri Health and Educational Facilities Authority.

They must raise casino fees, and they must agree to pour more money into promoting the Missouri Lottery in the hopes that more people will buy tickets.

The above items are presumed to generate about $100 million for the state avoiding the need to make an equal amount of additional cuts to government programs and services.

Since some of the same items have been proposed without success in years past, Nixon is taking a bit of a financial risk by basing his budget on an assumption that they will all come to fruition this year. But Nixon said he is prepared to make additional budget cuts if things don’t work out as planned.

“If we get to the finish line and it doesn’t pass, I’ll do what I’ve had to do in the past, which is make the necessary withholds” of money from state agencies, Nixon said.

Missouri lawmakers could choose to disregard Nixon’s new revenue assumptions and make additional budget cuts themselves. Those choices will be made over the next several months, as the budget moves first through the House, then the Senate, and ultimately ends up in negotiations in late April or early May.

Nixon said he assumed the revenue-enhancement measures would pass the Legislature because they have not previously been controversial. For example, the tax amnesty proposal passed the both the House and Senate in differing forms last year but never made it to the governor’s desk.

“I’m confident that all the areas we laid out have received strong bipartisan support in the past, and would expect them to do so again,” Nixon said.

House Budget Committee Chairman Ryan Silvey, R-Kansas City, concurred that many of Nixon’s revenue measures have been vetted by the Legislature and so might be reasonable to include in the budget.

But Silvey added: “It’s tenuous to put money in, right off the start, for bills that haven’t passed.”

That is especially the case since there may be a greater reluctance to embrace the revenue-enhancement measures in the state Senate.

Contrary to Nixon’s assertions, Senate President Pro Tem Rob Mayer said he doesn’t believe the tax amnesty bill stands a very good chance of passing this year.

There are several senators “who don’t feel like it’s good public policy to allow those who fail to pay their taxes on time to get some leniency,” said Mayer, R-Dexter. Some senators also question whether the initiative as assumed by Nixon actually would prompt the payment of $52 million of taxes that would not otherwise be collected.

Mayer said some senators also are concerned about infringing on people’s privacy by giving the Department of Revenue new powers to garnish money from their bank accounts if they haven’t paid their taxes.

Both Mayer and Silvey said they also have concerns about Nixon’s assumption that Missouri can generate an additional $15 million in lottery revenues to benefit education by spending an extra $4 million on lottery advertising. Similar marketing efforts have netted Missouri more lottery proceeds in the past.

But “there is even for myself and other senators philosophical differences about promoting gaming to any higher degree than we already do as a state,” Mayer said. “We don’t like the idea of depending on gaming to generate the revenue that we need to meet some of our basic obligations to education and the social services programs.”

Those philosophical reservations could get put to the test as lawmakers decide where to draw the line between financial need and sound public policy.

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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