Mo. Gov. Nixon declares job creation top priority, but says state cannot fully fund schools

Mo. Gov. Nixon: Jobs top priority in poor economy

JEFFERSON CITY, Mo. — Gov. Jay Nixon declared job creation his top priority while suggesting that Missouri’s public schools and colleges should share the burden for the state’s burgeoning budget woes.

In a State of the State address Wednesday that acknowledged continued job losses and declining tax revenues, Nixon said Missouri must provide greater incentives for biotechnology firms, job training and existing businesses that expand locally.

He stressed that public schools would receive a record amount of money under his proposed budget for next year — even though it would give K-12 school districts less than one-fifth of the funding increase needed to fully finance Missouri’s school formula.

Nixon also proposed cuts for public universities and colleges, which have agreed to hold tuition flat in 2010-2011 to avoid even larger cuts. Nixon sought to soften some of the financial blow by urging an expansion of scholarships for community college students — a pledge from his 2008 gubernatorial campaign that lawmakers have yet to fund.

The governor proposed a $23.9 billion operating budget for the 2011 fiscal year that would grow by a little more than 3 percent from the spending plan currently in place. It would do so by relying on nearly $1.2 billion in federal stimulus funds, some of which Missouri is not guaranteed to receive. Nixon’s budget assumes Missouri will get about $300 million if Congress extends the federal stimulus payments to states by an additional six months.

Nixon’s budget office announced Wednesday that it also was redirecting $150 million of federal stimulus funds away from college building projects and incentives for high-tech battery manufacturers to instead help close a $200 million shortfall in the current budget. Among the other projects axed because of the budget shortfall were various Capitol security improvements such as additional cameras and new locks.

Although Missouri has avoided the financial meltdown that has occurred in some states, “we still face sober — very sobering — financial challenges,” Nixon said.

The Democratic governor received a bipartisan standing ovation from lawmakers as he called upon them to pass what he dubs his “2010 Jobs Plan.” Missouri has lost 89,000 jobs since January 2008, according to Nixon’s budget figures. And at 9.6 percent, its unemployment rate — while slightly lower than the national average — is at its highest mark in more than 26 years.

“Our mission is clear: We must keep the jobs we have, and create thousands more,” Nixon said. “We must build a granite foundation for Missouri’s future growth. And we must balance the budget without raising taxes.”

Though some Senate Republicans remain wary of creating more tax credits or incentive funds, Republican House leaders pledged to work with Nixon on economic development measures,

“The No. 1 issue on everyone’s mind is the economy — job creation and job retention — and we will support the governor as we did last year on incentives,” said House Speaker Ron Richard, R-Joplin.

But Lt. Gov. Peter Kinder, who is expected to run against Nixon in 2012, criticized Nixon’s job performance in the official Republican response to the speech.

Kinder claimed in prepared remarks that Nixon “irresponsibly chose” to balance the budget with stimulus money last year, “and due to the governor’s failure to act swiftly to address the budget crisis, we now face an even bigger shortfall.”

Nixon’s proposed budget includes no pay raise for state employees and would eliminate an additional 544 state jobs — the majority in the Department of Social Services — while bringing his two-year state payroll reduction to a little shy of 1,800 positions.

But Nixon proposed no cuts — either in dollars or staff — for his own office.

“Keeping that central management intact is critical during these times,” Nixon’s budget director, Linda Luebbering, said in defending the decision.

Luebbering also defended Nixon’s decision to propose an $18 million increase for Missouri’s $3 billion school formula, instead of the nearly $106 million needed to fully fund it. She said there should be no cuts to classrooms.

“Given how difficult of a budget situation this is, any increase is really good,” Luebbering said.

Nixon drew bipartisan applause as he urged lawmakers to mandate that insurers cover autism treatments for children, toughen drunken-driving laws and enact new ethics laws for Missouri politicians and lobbyists. But Republican lawmakers sat silently as Democrats applauded Nixon’s call to reinstate Missouri’s campaign contribution limits, which they repealed a couple of years ago.

Nixon also called for tighter restrictions on the payday loan industry, which he labeled as a “voracious predator.”