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Governor’s withholdings include important manufacturing programs; reason to support HJR 72

Governor Jay Nixon Tuesday announced more than $1.1 billion dollars in withholdings from the upcoming state budget.  The announced withholding action comes about a week before the start of the state’s fiscal year which begins July 1.

The Missouri Constitution (Artticle IV, Section 27) states: “The governor may control the rate at which any appropriation is expended during the period of the appropriation by allotment or other means, and may reduce the expenditures of the state or any of its agencies below their appropriations whenever the actual revenues are less than the revenue estimates upon which the appropriations were based.”  The Constitution does NOT appear to allow withholding of appropriations for any reason other than an actual shortfall of revenue. Of course, because the fiscal year has not yet started, there can be no actual shortfall of revenue, leaving some to wonder if this action is premature or possibly without constitutional authority.

Included were cuts to the usual items: Elementary and Secondary and Higher Education, where Nixon withholds all of the growth in those line items.

But Nixon also withheld all, or nearly all, funding for:

  1. The Missouri Technology Corporation, including all of the funding for Innovation Centers;

  2.  Missouri Enterprise, the only state program dedicated to small and midsize manufacturers; and

  3. Customized training funds.

While a sizeable chunk of the withholdings have to do with sluggish tax receipt growth, as well as legislative efforts he supported that didn’t pass the legislature this session, Nixon also tied the budget withholdings to the series of ten bills he recently vetoed, eight supported by AIM.

Nixon told reporters at a press conference Tuesday afternoon he could release the nearly $180 million dollars he is withholding from education funding if the legislature sustains his vetoes of the ten pieces of legislation in September.

The following is a statement from AIM president Ray McCarty:

“Governor Nixon’s announcement points out the need for Missouri citizens to vote for HJR 72, soon to be added to the November ballot by the Secretary of State. The constitutional amendment provides that the governor notify the legislature when he or she is reducing the amount budgeted to items in the state spending plan when the state’s cash flow is not sufficient to allow the item to be properly funded. This constitutional amendment will stop any governor from using this withholding power for political purposes and establish checks and balances over expenditures that do not exist now. That is why AIM supports HJR 72 and calls upon the state’s voters to ratify the amendment at the ballot box in November.”

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