Roorda: The Truth Behind the Budget, School Funding Proposal Unenforceable, Property Tax Rebate Opportunity

The Truth Behind the Budget

The House of Representatives and Senate have both passed their versions of the state budget for the 2011 fiscal year, which begins July 1. House and Senate negotiators are now working on the final version, which both chamber must pass by a constitutional deadline of 6 p.m. on May 7.

The Senate version of the more than $23 billion budget for the upcoming fiscal year cut about $500 million from the proposed budget the governor presented in January. And that massive cut is in addition to the $300 million in spending reductions called for by the governor.

Although spending reductions are needed to get through the upcoming fiscal year, cutting alone will not put Missouri on a sound financial footing.

This one-sided approach to the budget will mean fewer state services from an already low-service state government and another round of even deeper cuts for FY 2012. It is time to break that cycle.

House Democrats support a balanced approach that includes maximizing the collection of money the state is due and reducing special tax breaks.

Over the last decade, the Republican-controlled General Assembly has steadily eroded the state's tax base by granting tax credits to the politically well connected. These tax giveaways now cost the state $600 million a year and the amount is growing.

In the last decade, the amount of money the state losses from tax credits has increased by 87 percent, with little tangible benefit for taxpayers.

House Democrats voted for some of these credits because they were supposed to create jobs and increase state revenue. But the promised jobs haven't materialized. It is time for the state to re-evaluate its 60-plus tax credit programs and eliminate those that aren't producing a positive rate of return for the state. House Republicans refuse to even have the debate.

Under the Missouri Constitution, the first item lawmakers must fund, after paying the state debt, is our public schools. In reality that is no longer the case. Because tax credits aren't part of the budget, they are taken off the top and are funded automatically - before the state pays the debt or funds public schools.

School Funding Proposal Unenforceable

Gov. Jay Nixon signed a midyear state spending bill into law on April 13 but declared that a controversial provision of the measure that would exempt 152 local school districts from sharing in a $43 million shortfall in education funding for the final months of the 2010 fiscal year is unconstitutional and won't be enforced. As a result, all 523 Missouri school districts are expected to get a 2 percent cut in their expected state funding for the current school year, although it possible a lawsuit could be filed challenging the governor's interpretation.

A provision of HB 2014 exempts so-called "hold harmless" school districts from the cuts. Hold harmless districts have their state funding frozen at FY 2005 levels but receive more money than they are entitled to under the state's formula for distributing state money to local schools. If enforced, the provision would result in the remaining 371 districts enduring even deeper cuts than the 2 percent called for in the governor's plan.

In a signing statement attached to the bill, Nixon said the disputed provision violates the Missouri Constitution's ban against legislating in appropriations bills. Although the statement carries no legal weight, it potentially could serve as warning against hold harmless districts suing to enforce the provision since if a court agreed with the governor's interpretation not only would any suing districts still be subject to the spending cut, but they would also incur litigation costs.

Property Tax Rebate Opportunity

The Circuit Breaker property tax rebate is available to certain senior citizens and people who are 100 percent disabled. As of April 9, 2010 DRA has processed $273,184.00 This surpasses last years total by $10,000 and we anticipate another $40-$50,000 additional by years end. There is assistance available to help fill out and file forms as well as determining if you are eligible for the program. You can visit this web page for more information: http://dor.mo.gov/tax/personal/ptc/

If there is anything I can do for you, please do not hesitate to contact my office. I enjoy serving my constituents as "their" voice in the Missouri State Capitol.