Missouri’s budget funds billions of dollars in teacher pay increases and projects
The Missouri Legislature on Friday approved a $49 billion budget — the largest in state history — that will use a cash-filled treasury to fund increases for teachers, income tax breaks, rural road works and a variety of improvement projects across the state finance.
That The House and Senate voted to submit a total of 17 budget bills to Gov. Mike Parson’s desk, with one bill serving as the second supplementary budget for this fiscal year, which ends in about two months. The deadline for finalizing the budget was Friday at 6:00 p.m. Parson has until July 1 to sign or veto the budget bills. The budget passed last year was $35 billion.
“We’ve had a great opportunity to do a lot of good with the budget, we have some resources this year that will allow us to do some transformative things across the state,” said Sen. Dan Hegeman, R-Cosby, Senate Chair for funds.
Money for starting and existing teacher pay increases, Medicaid expansion, school transportation, highways and the state pension system all made it into the final draft after a conference committee spent hours Wednesday trying to find compromises.
The increased investment on many fronts is due to a record surplus from increased revenue and over $2.8 billion in federal coronavirus relief funding from the American Rescue Plan Act.
“This is by far the best budget this state may have seen, but certainly in my time of my awareness,” said Rep. Peter Merideth, D-St. Louis said.
But not everyone was happy with the increased spending.
“Just keep in mind as we go through and these dollars are used for current expenses, they won’t be here next year and we have some tough decisions to make next year and the year after that,” said Sen. Denny Hoskins, R-Warrensburg , said.
The bill to fund K-12 education alone totals over $10.3 billion.
One of Parson’s original proposed posts, which was cut by Parliament but eventually restored, totaled over $21 million to raise the annual minimum wage for new teachers to $38,000. Currently, the minimum is $25,000 that is one of the lowest in the country.
The plan calls for a 70/30 split between state and local funds to increase those salaries.
The state has also allocated over $37 million to Career Ladder, an optional program that offers teachers with at least five years of experience in the state the opportunity to earn more money by taking on additional work, such as career development opportunities.
In addition, the law invests more than $214 million in school transportation. The state is fully funding its part of the transportation formula for the first time in years.
On the staff development side, the state provides funding for several programs, including $5 million for a high school-level geospatial training program for St. Louis that is affiliated with the city’s National Geospatial Intelligence Agency.
One-time income tax credit
In the middle of Friday’s budget debate, the Missouri House of Representatives voted 104 to 30 to pass a bill that would give some Missouri income taxpayers a one-time loan. The legislation that will now go to Parson.
The bill uses $500 million in general government revenue to reimburse residents for what they paid in income taxes, up to a limit of $500 for those filing taxes alone and $1,000 for couples who file taxes together.
They would only go to Missourians who paid income taxes for the previous tax year. Because the funds allocated for the loans are a limited amount, there is no guarantee that a taxpayer will receive the full amount that they paid.
House Budget Speaker Cody Smith, R-Carthage, said he would have preferred his version of the bill that earmarked $1 billion in state funding for the loans, but he “wouldn’t make perfect the enemy of good.”
“This gives taxpayers money back when we’re in a situation where the state government has too much of it,” Smith said.
The loan contains a salary cap, meaning if a single person makes more than $150,000 annually or a couple makes more than $300,000, they would not qualify.
That cap was introduced by Senate Minority Leader John Rizzo, D-Independence, who also spoke out in favor of the tax credit on Friday.
“If we can give them a little extra money to make ends meet or help them buy groceries or whatever it may be, I think it’s good [way to] spend the money,” Rizzo said.
House Democrats didn’t share the same enthusiasm for the loan, and many said that relief should go to Missourians who need it most, as opposed to people who make up to $150,000 annually.
Rep. Barbara Phifer, D-Kirkwood, said it’s a missed opportunity to give back to people who need it, and just because someone doesn’t pay income taxes doesn’t mean they don’t contribute to the state in other ways, like sales taxes.
“What we are doing today is real discrimination against young families here in Missouri. And I’m really sad about that. We could have done it differently,” Phifer said.
Transport and pensions increased
Increased spending was recorded in a variety of areas credited to record sales.
In transportation, the legislature provided enough money to reset Amtrak service to two trains per day between St Louis and Kansas City instead of the current one.
In addition, the legislature added $7 million for public transit systems statewide, bringing that total to over $8.7 million.
They also approved $100 million for the maintenance and repair of Missouri’s rural roads.
“It’s great to have this there to address the needs of country roads that continue to deteriorate and hopefully we can move forward and pay a little more attention to the less traveled roads out there,” Hegeman said.
Lawmakers also approved Parson’s motion to add $500 million to Missouri’s government employee retirement plan, known as MOSERS.
This year’s budget also fully funds Medicaid, including its expansion.
While an attempt to give lawmakers the power to provide annual funding for the expanding population, including the ability not to fund it at all, has been passed by the House, funding is in the budget.
One portion of the Department of Health and Elderly Services and Department of Human Services funding bills that drew criticism was wording that prohibited government funds from being used for entities other than hospitals that perform abortions, or an affiliate of those entities.
Senator Jill Schupp, D-Creve Coeur, said the language was designed to devalue Planned Parenthood and called attempting to legislate through the budget process unacceptable.
“What we’re going to do is put 45,000 Missourians at risk of not getting the screenings they need, when they need them, because they’re going to be busy finding a place that will take them and offer them those services can. ‘ said Scale.
Nearly $3 billion in federal spending
In addition to the operating budget funding bills, the legislature also had billions of federal dollars earmarked for statewide projects and programs.
The bill includes more than $2.8 billion in federal money, mostly from the American Rescue Plan Act. It includes nationwide projects such as broadband development and college improvement projects.
The projects also include over $104 million to build a new crime lab within the Department of Public Safety and more than $1 million to test sexual assault kits.
Counties and cities also received their share of the federal dollars, with funding for over 10 projects in the St. Louis area alone, including $15 million for the removal of condemned vacant lots owned by the city and $40 million for the University of Missouri. St. Louis for its Campus of the Future project, which involves the construction of buildings.
However, the bill was criticized by some members of the House of Representatives on Friday, who felt they did not have the opportunity to review the bill and have the opportunity to negotiate. The Senate passed it the night before, and the House of Representatives made no motion to convene.
The state has until the end of 2024 to allocate funds from the American Rescue Plan Act. Some House members wanted to use more of this time.
“This is our opportunity to step up and say, ‘No, call us back to a special session.’ Let’s do it right. Let’s make sure all voices are heard,” said Rep. Rasheen Aldridge, D-St. Ludwig.
“It is the result of a long series of compromises and I will side with our budget leader. I think we got a very good deal on the house and I think we should vote yes,” said Rep. Phil Christofanelli, R-St. Peter.
Ultimately, the bill passed 114-16.
Follow Sarah Kellogg on Twitter: @sarahkkellogg