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April 8, 2024 |  By: Rudi Keller - Missouri Independent

Senate leader warns of ‘tough timeframe’ to complete work on Missouri state budget

budget

By Rudi Keller - Missouri Independent

Missouri has plenty of money left in reserve as the state Senate prepares to work on the almost $51 billion budget passed Thursday in the House, but one looming issue could disrupt final passage and put the surplus in danger of disappearing.

Lawmakers must renew a set of medical provider taxes, known as the federal reimbursement allowance, vital to funding Medicaid. The taxes, set to expire this year, were last renewed in a 2021 special session called when factional fighting in the Missouri Senate prevented the bill from passing earlier.

Neither chamber has even debated a bill extending the taxes this year. 

“Unless we pass the federal reimbursement allowance, this whole budget is a lie and it’s a complete joke,” House Minority Leader Crystal Quade, a Springfield Democrat, said during a news conference Thursday.

The budget approved Thursday in the Missouri House would provide a 3.2% pay raise for state workers and a 2% boost to higher education institutions as well as fund major upgrades on Interstate 44 and pay for sending National Guard troops to the border with Mexico.

It proposes spending $14.1 billion in general revenue for ongoing state operations, with another $800 million of general revenue for state building construction and maintenance. Spending at that level would consume about $1.6 billion of the accumulated state surplus, which currently stands at about $6.4 billion in general revenue and other unrestricted funds.

The provider taxes bring in about $1.4 billion annually and draw an additional federal match of nearly $3 billion. If lawmakers do not renew the taxes, the surplus would have to be tapped to maintain the Medicaid program without cuts.

The same issue that forced a special session in 2021 again faces lawmakers — whether Planned Parenthood, which operates family planning clinics in Missouri should be barred from providing services paid for by Medicaid.

Planned Parenthood was the last abortion provider in Missouri when the procedure became illegal in 2022 and its affiliates continue to provide abortions in other states. 

The Missouri House has passed a bill to make it illegal for any public funds, including Medicaid reimbursements, to go to abortion facilities or their affiliates, targeting Planned Parenthood. The bill has been passed in a Senate committee and is awaiting floor debate.

A bill renewing the provider taxes is also awaiting Senate approval. The Senate will work on the Planned Parenthood bill next week, Senate President Pro Tem Caleb Rowden said, followed by the provider tax bill.

The provider taxes must be passed before the budget can be debated, Rowden said.

“That’s the only responsible thing to do,” he said. “In the absence of that $4 billion, you have a much different equation in front of you.”

Democrats in the Senate will work to defeat the bill targeting Planned Parenthood and pass the provider taxes, Sen. Doug Beck of St. Louis said during a news conference. He said a proposal expected to be on the Nov. 5 ballot restoring the right to abortion would also protect Planned Parenthood’s status as a Medicaid provider.

“Voters are going to get a chance in the fall to actually be able to fund these things and bring back women’s health care and things that have been defunded by the Republicans,” Beck said.

During the final votes on 17 spending bills Thursday, House Democrats complained that the spending plan shortchanges education and services for vulnerable people.

Democrats argued that the budget was inadequate because it cut Gov. Mike Parson’s proposal for higher education funding, reduced funding for teacher pay supplements and put caps on how much providers can pay personal care aides who help people with disabilities.

State Rep. Kevin Windham, a Hillsdale Democrat, said he would rate this year’s budget with “two out of five stars” because rank-and-file members were frozen out of big decisions.

“This year the process felt especially dominated by the budget chair,” Windham said.

Republicans defended the budget and Budget Committee Chairman Cody Smith, a Republican from Carthage and a candidate for state Treasurer. .

“It is very difficult for me to hear that we are not doing everything we can,” said state Rep. Ed Lewis, a Republican from Moberly.

The budget approved Thursday is $1.9 billion less in total spending than the spending plan proposed in January by Parson. Much of that reduction is in the Medicaid program and other services provided by the departments of Mental Health, Health and Senior Services and Social Services.

Smith cut nearly $200 million in general revenue and more than $1 billion in those departments.

The cuts were made, Smith said, because of lower demand for services because of declining Medicaid enrollment. Missouri is examining the eligibility of everyone on Medicaid for the first time in several years because the process was suspended during the COVID-19 public health emergency.

The number of people on Medicaid has fallen by about 160,000 – or about 10% of those enrolled – since eligibility reviews began last year. 

At their news conference and during Thursday’s debate, Democrats said some of Smith’s cuts, and language restricting how money can be spent, will mean fewer people get services. 

“They’re not going to be able to hire, they’re still going to have vacancies and then he’s going to look at the leftover money that they weren’t able to spend and say, now I can cut you more because look, you’re not spending all the money we gave you,” said state Rep. Peter Merideth, ranking Democrat on the House Budget Committee.

Lawmakers now have five weeks remaining for the Senate to write its version of the budget, pass it and reconcile differences with the House. The constitutional deadline to pass spending bills is May 10.

Senate leaders expressed confidence the upper chamber can meet those deadlines while acknowledging that factional disputes could disrupt quick action.

“The time frame is going to be tough, honestly,” Rowden said. 

The Freedom Caucus, a group of six Republican senators, is going to examine the House-passed budget to look for additional cuts, said state Sen. Bill Eigel of Weldon Spring. He doesn’t want to spend any more general revenue than the state anticipates in tax receipts.

Estimates released in December project the state will receive under $13.2 billion in general revenue in the fiscal year that begins July 1. 

The budget proposed by Parson anticipates spending $15 billion in general revenue, including $14.1 billion on ongoing operations. The House-passed budget has a net cut of about $60 million in general revenue and about $136 million when building construction and maintenance spending is included.

“I can’t imagine that we would want to spend more than we took in,” said Eigel, who is a candidate for governor. “I don’t want to shy away from the idea that we need to make some significant cuts to the finances of the state.”