House Budget Chairman not optimistic going into FY ’18 budget process

The Missouri House’s Budget Committee Chairman said he doesn’t, “have a lot of optimism,” about putting together a budget for the fiscal year that begins July 1.

State revenue continues to come in more slowly than legislators and the governor projected when working on the current fiscal year’s budget.  Shell Knob Republican Scott Fitzpatrick said that means when Governor-Elect Eric Greitens (R) delivers his budget proposal next month, it could call for little more than covering things the state is mandated to pay.

“The biggest challenge that he’s going to be facing is the increase in Medicaid and other mandatory programs, that basically have to be funded in order to pay the providers that are providing services to the people that are eligible under state law,” said Fitzpatrick.

He said if the legislature does not find a way to stem those costs before Fiscal Year 2018 begins, “I would anticipate seeing cuts to a lot of other programs in order to just pay the bills related to Medicaid.”

Fitzpatrick said under the fiscal circumstances in which Greitens will be taking office, “I think he’s going to be doing well just to be able to get us a budget that balances without relying on unreasonable revenue assumptions, then we’ll take it from there and hopefully make some policy adjustments this session that will allow us to curb some of those costs.”

State General Revenue growth in Missouri spiked briefly, earlier this week, at more than 4-percent, but again fell off to well below the roughly 5-percent said to be needed to fund the current fiscal year’s budget.  Governor Jay Nixon (D) has, since that budget went into effect, withheld $150-million to keep it balanced.  Fitzpatrick said without a major improvement in revenue growth, more restrictions will be needed.  He called on Nixon to make them.

“If he wants to leave this state in a better spot than the way he found it he needs to make restrictions before he leaves office, but if he chooses not to do that then [Governor-Elect Greitens] will have to do that pretty much immediately upon assuming office,” said Fitzpatrick.

“Barring an unforeseen explosion in revenue growth for December, I would anticipate $200-million is around what this round of restrictions should be, and if things get worse from there then it could be possible that even more than that would be required,” said Fitzpatrick.

All this means that Fitzpatrick, as he enters his first year chairing the House Budget Committee, does not expect to make many people happy while playing his role in preparing the Fiscal Year 2018 budget.

“I’ve told everybody who’s come to talk to me about the budget this year that they shouldn’t expect anything good to happen,” said Fitzpatrick.  “’Play defense,’ is kind of what I’ve told anybody whose job relies on a state appropriation because it’s going to be a tough year.”

Fitzpatrick said it will also be difficult to take care of his personal priorities:  fully funding the foundation formula for K-12 education; boosting state employee pay; and accelerating the repayment of state debt.

As early as next week, members of Nixon’s administration will join members of the governor-elect’s staff in meeting with House and Senate budget planners to prepare a Consensus Revenue Estimate – a projection of how much revenue the state will bring in during Fiscal Year 2018 that they will base a budget plan on.