Record Missouri budget grows as Senate adds spending, House works on $1B tax credit plan

School transportation, teacher pay get boosts as Senate Appropriations Committee works through $46.5B package

By: - April 20, 2022 5:55 am

Members of the Senate Appropriations Committee, from left, Vice Chairman Lincoln Hough and Chairman Dan Hegeman, discuss an item Tuesday with Drew Dampf, Hegeman’s chief of staff, as Sen. Lauren Arthur studies budget documents. (Rudi Keller/Missouri Independent)

Missouri would pay its full share of public school transportation costs for the first time in more than 20 years under a budget proposal approved Tuesday by the Senate Appropriations Committee.

The committee added $214 million for school transportation to the $114 million included in the record-setting $46.5 billion budget plan approved by the Missouri House. It was one of several additions made to the fiscal 2023 spending plan during committee work in both chambers that could add $2 billion or more to the total.

Other big additions include reviving Gov. Mike Parson’s proposed $500 million deposit to boost the investment fund that pays most state worker pensions, approved in the Senate committee, and a $1 billion plan for rebates of up to $500 for individual income tax filers approved in the House Budget Committee.

Fully funding the state’s 75% share of school transportation costs has been a long-sought goal for education groups. The last time the state came close to paying the full share was in fiscal year 2000, said Kari Monsees, deputy commissioner of education. The last time it actually paid 75% was in fiscal 1991, he said.

Exactly how much each district would gain from the additional funding would be based on the district’s allowable costs, Monsees said. The department looks at the miles traveled, the efficiency of the routes and other factors before approving a district application for reimbursement.

Putting the money in the transportation subsidy is the best way to assure all school districts benefit, committee Chairman Dan Hegeman said. In his northwest Missouri district, he said, only about half the schools would benefit from an increase in spending through the $3.6 billion foundation formula.

The formula, which provides the majority of state aid for public schools, has provisions that protect districts that would lose funding as a result of population or demographic changes but those districts do not usually gain from increased spending.

Fully funding transportation “would be extremely helpful to local school districts that have had to use an increasing share of local money over the years to transport students as the state funding percentage has generally declined,” Brent Ghan, deputy director of the Missouri School Boards Association, wrote in an email. “The Senate committee’s funding level for student transportation would free up more local money that could be spent in the classroom.”

Districts will see a boost in another important source of funding: A dedicated sales tax. A booming economy means that tax will bring in close to $1.15 billion, up from $958 million, an increase worth about $210 per pupil.

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Hegeman’s committee is working under a tight deadline to win Senate passage of the 14 bills funding state operations and another three bills financing capital spending needs. 

After this week, there will be two weeks left before the constitutional deadline to pass spending bills.

In January, Parson proposed a $47.3 billion budget for the coming fiscal year that allowed for a $1.6 billion state budget surplus when it ends on June 30, 2023. Revenue growth far in excess of expectations – up 7.2% for the year through Monday compared to an anticipated decline of 0.5% – could add $1.4 billion or more to Parson’s projection.

Other winners in the Senate budget process include:

  • Teachers. The Missouri House rejected Parson’s plan to provide $27.1 million to boost the starting pay for teachers to $38,000 and instead added a $37.5 million appropriation to revive the Career Ladder program. The Senate Appropriations Committee approved Parson’s plan, added $10 million to eliminate a local match requirement, and kept the House plan for Career Ladder.
  • State corrections officers. Hundreds of current and former corrections workers have been waiting for the state to pay $113.7 million in back wages won in a 2018 jury verdict and upheld last year by the Missouri Supreme Court. An amendment from Parson added Tuesday would provide $49.5 million to settle their claims and provide the required pay for the time officers spend checking into and out of their shifts.
  • Colleges and universities. Parson’s budget gave higher education institutions a 5.3% increase. The committee added $10 million to the $161.3 million in basic funding for community colleges and an extra $4.6 million for Lincoln University to fully match its federal land grant funding

There were dozens of small additions to the budget in the Senate committee meeting as senators tapped those surplus dollars. The committee approved $7 million for aid to local transit systems, $2 million sought by Sen. Karla May to fund minority business incubators in St. Louis and $3 million requested by Sen. Lincoln Hough to pay for nursing education grants.

Hegeman added an increase to the mileage reimbursement for state employees to match the 55 cents a mile allowed by the IRS as a deduction for using a car for business needs.

It is a travesty that state employees have had to subsidize state government for the past few years,” Hegeman said.

The $1 billion tax cut plan will provide credits of up to $500 on single returns and $1,000 on combined returns if passed. It was approved by the House Budget Committee after Democrats failed in two attempts to change it, first into a direct $1,000 payment and then to make it a refundable credit, meaning each person eligible would receive the full value.

A non-refundable tax credit is used up when it matches a person’s tax liability. With a refundable credit, the state would pay the taxpayer the difference between their liability and the value of the credit.

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As written, state Rep. Peter Merideth, D-St. Louis, said, “it is almost one-third of Missourians who wouldn’t get anything, and it is the one-third of the people who have the least.”

The reason they wouldn’t be eligible, said state Rep. Doug Richey, R-Excelsior Springs, is because they pay no state income tax. 

“This isn’t about those who are impoverished, or those who are struggling, or those who are wealthy, but those who have paid in,” Richey said.

The House Budget Committee also approved the three bills with about $1 billion for new repair and construction spending. One bill sets aside $300 million of surplus general for a newly created Missouri State Capitol Commission Capitol Preservation Fund.

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Rudi Keller
Rudi Keller

Rudi Keller covers the state budget, energy and the legislature. He’s spent 22 of his 30 years in journalism covering Missouri government and politics, most recently as the news editor of the Columbia Daily Tribune. Keller has won awards for spot news and investigative reporting.

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