Tuesday, April 28, 2015

House and Senate Reach Agreement on Fiscal Year 2016 Budget

Weekly report from Rep. Patricia Pike

The House and Senate have been very busy finalizing the Fiscal Year 2016 State Operating Budget to send on to the Governor. An important change for Education will be the budget adjustments and addition of restrictive language to move Missouri toward new education standards and away from Common Core.

Additional highlights in the Legislative Update.
House and Senate Reach Agreement on Fiscal Year 2016 Budget (HBs 1 – 13)
After several long days of negotiations and discussion, the House and Senate finally worked out their differences and gave final approval to the Fiscal Year 2016 state operating budget. The bills now move to the governor’s desk a full two weeks ahead of the constitutionally-mandated budget deadline.

During the budget process, the Senate made significant changes to the House version of the state spending plan, including a lump-sum budgeting approach that included 4 to 6 percent cuts to health, mental health and social services programs. These changes drew the scrutiny of some on the House side and even lost the backing of leadership in the Senate as negotiations progressed. The final version of the budget approved by both chambers moves much closer to the original House spending plan, but does take some fiscally responsible steps to rein in the growth of the state’s social welfare programs. The final version of the budget does include the Senate’s plan to move Missouri’s Medicaid population to a system of managed care, but the transition will occur slowly and only after the plan has been reviewed.

The $26 billion spending plan that will take effect on July 1 of this year does include record levels of funding for elementary and secondary education. In total the state is now spending just under $5.8 billion on public K-12 schools, which represents more than 22.2 percent of total state spending. More than $3.2 billion of that funding is state general revenue, which represents more than 36 percent of the $8.85 billion state dollars over which the legislature has direct spending authority. The budget also includes significant boosts to several important education programs, and sizeable funding increases to the state’s public colleges and universities.

Some of the funding highlights contained in the FY 2016 budget include:
· An additional $84 million for the School Foundation Formula for K-12 public education;
· An increase of more than $2.4 million to the Parents as Teachers Program;
· Full funding for virtual education;
· Funding to create a state dyslexia coordinator;
· A $12 million increase for performance funding for Missouri’s public institutions of higher education;
· More than $5 million in new equity funding for Missouri’s two-year colleges;
· Funding to establish a state military advocate;
· A 3 percent funding increase to providers who care for elderly and developmentally disabled Missourians
· A 3 percent provider rate increase for autism projects; and
· Additional funding for MoHealthnet adult dental benefits.

House Sends Unemployment Reform Legislation to Governor (HB 150)
The governor will have the opportunity to sign legislation that supporters say will keep Missouri’s system of unemployment financially stable. House members gave final approval this to a bill that would link unemployment benefits to the rate of unemployment, and ensure the state keeps more money in the unemployment trust fund.

Supporters of the bill said it is meant to protect the state’s unemployment system from insolvency in the event there is another economic downturn. Missouri is the only state that has been forced to borrow money from the federal government to pay for unemployment benefits during each of the last five economic downturns. Borrowing federal dollars has the added negative impact of taking away a portion of a federal tax credit businesses normally receive. The legislation is designed to make sure the state has enough money in its unemployment trust fund so that businesses don’t have to pay a penalty. Specifically, it would increase the minimum amount of money in the fund before employers’ contribution rates decrease. For example, Missouri businesses would see their contribution rates decrease by 12 percent if the fund has a balance greater than $870 million.

The bill also ties unemployment benefits to the average unemployment rate so that more benefits are available when unemployment is high. If the state were in a position of high unemployment (9 percent or higher) benefits would be available for 20 weeks. In periods of low unemployment (lower than 6 percent) benefits would be available for 13 weeks. Supporters noted that a similar system is already in place in states like Georgia and Florida. They call the change an important step toward ensuring Missouri can afford to help its citizens during times when they are without work.

The bill lost some support in the House after key changes were made in the Senate. Several House members who had supported the House version of the bill changed their votes to no because of a Senate amendment that would define severance pay as wages. Opponents said the change would make it even more difficult for unemployed Missourians to obtain the financial support they need to pay their bills and keep food on the table.

The governor now has the option to sign or veto the bill. The legislation received 88 yes votes in the House, which is 21 votes short of the number needed for a successful veto override.