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Gov. Nixon Vetoes, Freezes $1B of Spending

David A. Lieb / Associated Press
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In St. Louis on May 28, Gov. Jay Nixon speaks about a group of tax cut bills passed in the final moments of the legislative session. Photo: KMOX/Allison Blood

In St. Louis on May 28, Gov. Jay Nixon speaks about a group of tax cut bills passed in the final moments of the legislative session. Photo: KMOX/Allison Blood

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JEFFERSON CITY, Mo. (AP) - Gov. Jay Nixon vetoed or froze more than $1.1 billion in spending Tuesday for Missouri’s next budget, citing concerns about declining revenues and the potential for new tax breaks to drain state dollars even further.

Nixon’s budget cuts include nearly $276 million in line-item vetoes and $846 million in spending restrictions affecting items from public schools and universities to the Medicaid health care program.

The Democratic governor said his actions were necessary because the budget approved by the Republican-led Legislature was “dangerously out of balance.”

“This is economic reality,” Nixon said at a news conference.

Missouri’s new budget is to take effect July 1.

Nixon’s actions mean there will be no funding increase for public school districts, colleges or universities when the new school year begins. But the governor said he could release the additional school money if legislators in September sustain his previously announced vetoes of bills granting special tax breaks to a variety of industries and organizations.

This marks the second straight year that Nixon has used budget restrictions as a means of gaining leverage over lawmakers during the September veto session.

Last year, Nixon also froze money for education and other programs, releasing it only after the Legislature failed to override his veto of an income tax cut bill. Last year’s battle came despite the fact that Missouri revenues were surging above expectations.

This year, Missouri’s tax revenues are falling below the projections upon which the budget was based. Nixon contends that shortfall would be worsened by up to $425 million annually if lawmakers override his vetoes of various tax-law changes, including bills offering sales tax breaks to computer data centers, electric companies, restaurants and fitness centers.

“While eroding our tax base with new loopholes for special interests, the Legislature simultaneously littered the budget with earmarks and new government programs, demonstrating misplaced priorities and a stunning lack of fiscal restraint,” Nixon said.

© Copyright 2014 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.

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