Nixon wants more money for Missouri schools, spurns GOP tax cut

In the most strident State of the State speech he has given since becoming governor in 2009, Nixon said that when elected officials go door to door during campaigns, they routinely promise to invest in schools and teachers.

“Well, you know what? It’s time to put our budgets where our campaign brochures are,” Nixon, a Democrat, told a joint session of the House and Senate.

The governor called for a $278 million increase for K-12 public schools, the first step in a two-year process to fulfill the state’s promise to fully fund the school aid formula passed in 2005.

He also gave an impassioned defense of public school teachers, urged that Medicaid be expanded to cover 300,000 low-income adults and said it was time to outlaw discrimination against lesbians and gays in the workplace.

Nixon castigated legislators for their perennial attempts — fueled, in part, by mega-campaign donor Rex Sinquefield of St. Louis — to cut teachers’ pay, reduce their retirement benefits or take away job protections such as tenure.

“That simply needs to stop,” he said.

Nixon’s speech, streamed online and delivered to a packed House chamber, showed his increasing emphasis on themes that could improve his standing among Democrats.

Term limits will prevent Nixon from seeking a third term as governor in 2016, but his name has been bandied about as a potential candidate for U.S. Senate against Republican Roy Blunt, or as a potential contender for the vice presidency or a Cabinet spot if a Democrat wins the White House.

In all, Nixon’s proposed $28 billion budget would increase education funding by nearly $500 million. Big infusions of cash would go to performance-based funding for colleges and universities, college scholarships, preschool funding, Parents as Teachers and school transportation, among other areas.

Republicans, who control both the House and Senate, were quick to criticize the foundation of the governor’s spending proposals.

For the budget year that begins July 1, Nixon is counting on 5.2 percent growth in general revenue, the main pot of tax money the Legislature controls. House and Senate budget leaders project growth at 4.2 percent.

“It’s easy to say you have a balanced budget when you just make up the number you’re balancing to,” Sen. Ryan Silvey, R-Kansas City, posted on Twitter during the speech.

The differing revenue estimates — along with Nixon’s inclusion of projected savings from shifting costs to the federal government by expanding Medicaid — result in a huge budget gulf between the governor and the Legislature.

Legislators will have to cut $214.5 million from his spending blueprint if they stick to their lower growth estimate, according to figures provided by Nixon’s budget director, Linda Luebbering.

They also would have to cut $94 million that Nixon’s budget spends as a result of shifting some health care costs to the federal government through Medicaid expansion.

What’s more, legislators want to use the improvement in state revenue to provide an income tax cut.

Nixon fought back on that issue, too, saying that Missouri was already a low-tax state — “sixth-lowest in the nation,” according to him — and that a tax cut “experiment” would jeopardize education funding.

Last year, legislators failed to override his veto of an income tax cut, which would have cut the top income tax rate and the corporate income tax rate. It also would have exempted from state income taxes half the business profits reported on personal income tax returns.

Republicans said they wouldn’t give up on their push to cut income taxes, which they say would increase productivity and help Missouri compete for jobs with neighboring states.

In a tweet, House Majority Leader John Diehl, R-Town and Country, said: “Hearing lots of ways to grow government tonight ... . Far less about growing opportunity by returning increased revenues to taxpayers.”

House Speaker Tim Jones, R-Eureka, who gave the official Republican response, attacked Nixon’s plans as “big government.” Jones reiterated his agenda for economic growth in Missouri: a substantial tax cut, a “right to work” bill diluting the power of labor unions and medical malpractice reform, among other efforts.

“It’s really unfortunate that this governor’s only solution to our problems is to throw more money at our problems,” Jones said. “I did not hear one substantial policy solution.”

For example, the governor did not propose a fix for unaccredited school districts or underfunded highway construction, Jones said.

Democrats applauded Nixon’s focus on education and Medicaid expansion. Senate Minority Leader Jolie Justus, D-Kansas City, said: “I think the governor was spot-on when he laid out his vision.”

Nixon said his budget continued making government smaller and smarter by cutting 81 state government jobs. That would bring the total number of state jobs he has cut to 4,611 since he took office.

Taking the biggest hit next year: the Family Support Division in the Department of Social Services, which is slashing in-person help for people applying for social programs as online applications are ramped up.

The news wasn’t all bad for state employees. They would get a 3 percent cost-of-living raise, restoration of matching funds for a deferred compensation program and flat health insurance premiums.

And some agencies would expand. The Children’s Division, for example, would gain 23 employees to improve services and train and retain caseworkers.

The governor also proposes a $198 million bond issue to build a new state mental hospital to replace an antiquated one in Fulton. Because the state’s “full faith and credit” would not be pledged to repay the bonds, voter approval would not be needed.

Nixon ballyhooed the state’s economic recovery, noting that Missouri has added nearly 44,000 jobs in the last year and the state’s unemployment rate has dropped to 6.1 percent, from 8.6 percent when he took office five years ago.

He ticked off recent wins on the job front, such as General Motors’ decision to build the GMC Canyon pickup in Wentzville and a new automotive supplier that will provide 150 jobs in Warrensburg.

“In every corner of our state, wages are up, personal income is up and unemployment continues to fall,” Nixon said.

A special session last month that approved tax incentives for the Boeing Co. didn’t result in Missouri’s winning the aircraft jobs, but Nixon said the effort had still been worthwhile: “We all know that if you want to win, you’ve got to compete.”

But in most of the speech, he was more critical about the Legislature’s role.

One line in his speech drew enthusiastic applause from Republicans: “We all know there are problems with Obamacare, and Washington’s implementation of it has been abysmal.”

Then Nixon followed with, “But rejecting Medicaid won’t fix any of those things.” Democrats heartily applauded that line.

On other subjects, the governor asked legislators to rein in tax credit programs that lack “a solid return” and urged them to reinstate campaign contribution limits.

Those who oversee public colleges and universities also got some advice from the governor, who urged no tuition increases, “Not a single penny.”

Nixon’s budget includes $17 million for a new loan program for Bright Flight scholars, the state’s top-scoring graduates who agree to stay and work in Missouri, and an additional $8.6 million for Access Missouri scholarships, which help needy students.

Marie French and Alex Stuckey of the Post-Dispatch contributed to this report.