Yesterday Rep. Jamilah Nasheed issued a press release asking to tap the state's Rainy Day Fund to help cushion the current budget crisis.

The Rainy Day Fund currently has $555 million in it.  Half of that is available to be transferred out this year.  That $275 million would go a long way to offset the estimated $300 - $350 million shortfall with which the state is wrestling.

The money transferred must be repaid – with interest – over a three year period, one-third each year. To implement the move, the Governor must make the request and it must be approved by both chambers by a 2/3 majority. (The relevant constitution section is here.)

The argument against using the fund is that it will only add to the burden in the years to come, especially if this recession is prolonged and state revenues are slow to rebound. If the sluggishness continues through 2009 or 2010, you’d have an even more disastrous budget to deal with.  That’s flirting with a worst case scenario for Nixon as he’d be extending his budget blues closer to re-election time.

The argument in favor of using the funds is: if we don’t use the rainy day fund with it’s raining, when will we ever?

Do Republicans wish to use the current budget crisis to "starve the beast" and force a leaner state government?  Will Nixon request use of the Rainy Day fund to place the blame for painful budget cuts on the legislature when they deny his request?

Wayne Goode declared that the state revenues this fiscal year were due to run $623 million behind previous projections.

That number is pretty close to the $640 million "pessimistic scenario" figure given by former budget director James Moody in his projections about three weeks ago.

Of course the worst case can always get worse...

Here's the Op-Ed that Matt Blunt says "was not accepted for publication by the (St. Louis Post-Dispatch)."

The St. Louis Post-Dispatch recently stressed the importance of understanding the state budget.  They should follow their own advice.

Missourians deserve to know the facts about the state budget.

The budget we inherited after years of liberal control in Jefferson City was an insolvent wreck, with a deficit of $1.1 billion. The budget my successor will receive is balanced, with a surplus.  This is an established fact.  Even liberal politicians acknowledge the surplus when they announce unsustainable plans to spend it on bigger government. It is regrettable that the newspaper is in denial about the dramatic improvement in Missouri’s budget.
In many states, the budget is in shambles. In Missouri the opposite is true. The National Conference of State Legislatures (NCSL) reported that 30 states face significant budget problems.  Here, we are fiscally fit, with revenue growth, ongoing savings from management and program changes, no new taxes, and large increases in funding for education.  NCSL reported that Missouri is among only 13 states with a stable or optimistic revenue outlook for 2009.

Our 2008 budget just posted the third consecutive surplus of my administration, with an ending cash balance of $833 million. As The Associated Press noted, this is Missouri’s strongest surplus in at least 20 years.  Further, the rainy day fund for emergencies has grown from $463.3 million to $557.3 million since 2005.

Other newspapers have praised the responsible stewardship that rescued Missouri’s budget from insolvency. It is against the Post-Dispatch’s editorial beliefs that it is possible to balance the budget, increase education spending, provide medical care for those in genuine need, and meet the state’s other responsibilities, all without raising taxes. It is possible to do this. It is what our Administration just did.

In January 2005, I inherited a budget that included a $1.1 billion deficit. The budget had spending of nearly $7.13 billion, against revenues of only $6.98 billion, leaving us $148 million short in our operating budget.  Additionally, the deficit included $790 million in mandatory spending that would have been necessary to sustain the old way of doing business and more than $68 million for other required payments.  The deficit was not a list of suggestions as the Post-Dispatch asserted.  For example, it included $460 million to pay for the growth of the old Medicaid system - a system attempting to provide public assistance to more than one out of every six Missourians and failing to even verify the eligibility for nearly a third of those who signed up.

On March 6, 2005, the newspaper presented its editorial remedy for the budget wreck.  They suggested I propose a tax increase.  We did not raise taxes.  Instead, we cut taxes, three times.  We made difficult decisions to control spending. We overhauled state government to produce savings and greater efficiency in the use of taxpayer dollars.
We reduced the number of state employees to below 60,000 for the first time in years. We proved wrong those who "knew" it was impossible to achieve financial stability without job-killing new taxes.

The editorial further misled readers about education by selecting 2001 as a funding baseline. Records will show I became Governor in 2005. The assertion that my administration increased elementary and secondary education by only 4.85 percent "more than in 2001" is extremely misleading.  Working with the General Assembly we have increased K-12 funding by 17.2 percent or $440 million.

As with K-12, the editorial used 2001 data to mislead readers about higher education.  Higher education funding in 2001 was $960.4 million. The next administration then cut this by $98 million, or 10.2 percent.  My administration increased funding for colleges, universities and students by $166.5 million, or 19.3 percent, to more than $1 billion, the largest ever higher education budget and the first to exceed $1 billion.

This does not include the additional $335.3 million we provided to higher education through the Lewis and Clark Discovery Initiative. Thus, the total infusion of new funding for higher education during my term has been more than a half billion dollars.

The tax relief we provided to taxpayers was directed primarily to seniors, military veterans, health care and manufacturing jobs. But the editorial implied that these "lost" revenues would be reductions in future budgets. In fact, they are incorporated into our budget projections. The newspaper’s error has the effect of double-counting the impact of tax relief. I do not view a tax reduction as taking money "away from" the government, or as a "loss" to the government. Tax relief is returning taxpayer money to taxpayers. We need to do more of this, not less of it.

I hope that my successor shares my principles of good government. If Missouri follows the lead of liberals with radical proposals to dramatically increase welfare spending, the surplus might be sustainable for a few years, but this will eventually drive the state to either bankruptcy or a tax increase.  If we continue on the path of fiscal responsibility, Missouri’s budget will remain strong and we will avoid the budget collapses that other states are experiencing because they failed to rein in spending.

UPDATE: Here's the editorial to which Blunt was responding.

Below is Speaker Rod Jetton's weekly email. He marvels at how the state went from a budget deficit to surplus without raising taxes, but seems to have forgot the $200 million a year cuts from Medicaid as the reason.  He also missed indications of a slowing Missouri economy. The Fed's Beige Book surveys for example, and March's 15% decline in sales tax receipts.

One of the key responsibilities of the House is passing a state budget each year.  This year's budget was the largest in the state's history.  This budget contained funding increases for education, healthcare, agriculture, and public safety.  The budget totaled nearly $22.5 billion, however just because we have passed this large budget does not mean we have been fiscally irresponsible.

 While the House passed the $22.5 billion budget we were also able to put away $190 million into the Budget Reserve Fund.  This fund is essentially a savings account for the State where we put extra revenue for future problems.  For example if in the near future, because of an economic downturn, the state was short funds the General Assembly could dip into the reserve fund to avoid the budget either going into deficit or having to raise taxes. 

 When I go around the state talking to people one of the things that I like to mention, because I am so proud of it, is that during my four years as Speaker we have not raised your taxes once!  Now some people have asked me how does the state go from budget deficits to surpluses and the largest budget in the state's history without raising taxes?  The simple answer is you helped us do it. 

 More Missourians than ever before are going out and finding a job and their hard work is leading to larger sales tax and income tax revenues.  While other states are shedding jobs and seeing an economic downturn Missouri is adding jobs and experiencing a strong economy. 
     
      As of September of 2007 Missouri had created 92,000 new jobs since 2005.  Also as of the month of February income tax receipts have increased.  This shows more people are working and they are making more money.
     
      The job growth and strong economic performance of Missouri over the past four years has led to record revenue for the state.  In Missouri we have been able to pass the largest budget in the history of the state, with large funding increases for education, healthcare, and public safety, while not raising taxes.  We even have been able to cut taxes for seniors through the tax cut on social security benefits and we still were able to put away $190 million into the "rainy day" fund for the state.
     
      Being fiscally responsible is important to me.  You cannot spend more money than you have so why should the state be any different?  Through strong economic growth Missouri has been able to turn around its budget situation from billion dollar shortfalls to surpluses, tax cuts, funding increases, and still able to save a couple hundred million for the future.
     
      This is an amazing story not many other states can tell and it has all been thanks to Missourians getting out there, finding jobs and working hard. 
 
 As always, if you have any questions on this or any other issue, I can be reached at 573-751-5912 in my Jefferson City office, or through the mail at: Speaker Rod Jetton, State Capitol, Jefferson City, MO, 65102.  Also, you can reach me through email at rod.jetton@house.mo.gov.

Probably have the same source as Antonio, but I've made a few phone-calls, and it's for real.

Governor will veto the economic development bill.

Among his reasons will be the enormous negative impact all the tax credits will have on the state budget.  No mention of a special session to take up the task of an economic development bill, but it wasn't ruled out either.

It depends on the issue.  And the monsterous problem of the budget has brought them together - for now.

Thus on the same day that the American extoled the virtues of Lewis Reed staying away from a joint statement with Mayor Slay, Lewis Reed made a joint statement with Mayor Slay, and Darlene Green.

The subject of their statement was the budget shortfall caused by pension liabilities.  A bill that will be introduced tomorrow at the Board of Aldermen will authorize a $125 million bond issue.  There'll still be $20 million gap that will have to be bridged by some combination of new taxes, fees and cost cutting.

Our state's economy is improving but we're not to the point yet that a tax increase is in order to pay for more government programs, no matter how good the idea.

Government programs -- no matter how many people benefit -- only make sense if you can fund them.

And in November, the message was clear.

Voters wished for a governor who would make cuts in lean times.

We have it, for better or worse. That all depends on which side of the political fence you're on.