Nixon makes cuts to balance 2017 budget

Gov. Jay Nixon took action this week to balance the Fiscal Year 2017 budget by restricting $115.5 million in new or increased spending, saying he was protecting key priorities including K-12 classrooms, higher education and services for Missourians with mental illnesses and developmental disabilities.

“In order to protect our shared priorities like public education, college affordability and mental health, a number of new and expanded programs will have to be pared back or put on hold,” said Nixon said in announcing the restictions on Wednesday.

The cuts do not touch funding increases in the FY17 budget for the K-12 foundation formula, performance and equity funding for higher education institutions, scholarships or the approximately $200 million increase for the Missouri Department of Mental Health.

However, the governor cautioned that further restrictions would be necessary if the legislature overrides his vetoes of three tax breaks, which would reduce revenues by more than $60 million annually.

The spending cuts are necessary because of less-than-projected revenue growth for the fiscal year that ended June 30. While collections from individual income taxes, sales taxes and withholding taxes all rose significantly in FY16, net corporate income taxes decreased by 35 percent compared to the previous year.

An itemized list of the $115.5 million in spending restrictions is available here:

http://oa.mo.gov/sites/default/files/FY_2017_Expenditure_Restrictions_07_06_16.pdf