Missouri Senate Appropriations Committee Chairman Lincoln Hough, right, and Vice Chairman Rusty Black speak with state budget director Dan Haug April 16 during a break in committee work (Rudi Keller/Missouri Independent).
More than half a billion dollars in general revenue earmarks added to the Missouri budget for hundreds of local projects or favored vendors will be in play when the final budget negotiations take place next week.
The Missouri Senate on Tuesday night will start debating 13 spending bills to fund state government operations in the coming year. The bills would appropriate $49.4 billion — $1.5 billion more than the proposal approved in the Missouri House and $700 million less than proposed by Gov. Mike Kehoe in January.
The Senate plan includes several new big-ticket items added in committee work, including $300 million more for public schools through the foundation formula, $107 million more for child care subsidy payments and $92.7 million to pay a software firm that won a judgment over claims it was not paid for work it completed.
But the biggest source of new spending in the Senate budget plan is 169 line items for favored projects and programs. The $441 million in earmarks — including $332.5 million in general revenue — range in size from $36,000 for the Kansas City Police Department to implement “crime prevention through environmental design training” to $37.9 million from federal funds for the Missouri Office of Refugee Administration, an independent office of the not-for-profit International Institute of St. Louis that was created in 2018.
The House had its own batch of earmarks, 105 in the operating budget plus 44 more in the capital appropriations bills, totaling $295 million. Of those, 57 — totaling $126.3 million, including $115 million in general revenue — were cut in the Senate. A dozen items were increased by a total of $7 million.
There are two earmarks especially important to the top budget writers in each chamber.
Last year, lawmakers agreed to spend $8 million to renovate a historic footbridge on Jefferson Avenue in Springfield, in the district of Senate Appropriations Committee Chairman Lincoln Hough, and $12.5 million to purchase 1,800 acres in McDonald County, in the district of House Budget Committee Chairman Dirk Deaton of Noel.
Then-Gov. Mike Parson approved the footbridge and vetoed the state park. Deaton put the park back into the budget at $19 million for 1,600 acres and cut funding for the footbridge. Hough cut the park funding and restored money for the footbridge.
The total of new earmarks from the two chambers, 318 so far, is the largest number of such items included in a budget plan as the state built an enormous budget surplus during Parson’s second term.
The number represents only new items not included in Kehoe’s budget that are identifiable for a single community or vendor. Many of the hundreds of earmarks added in the final years of Parson’s administration are not included in budget tracking by The Independent.
“We’ll just sit down with the guys in the House and see where their top top priorities are,” Senate Appropriations Committee Chairman Lincoln Hough, a Springfield Republican, said when asked how many he expects to keep in the final budget. “I don’t put things in the budget on the Senate side that I don’t then go to conference and fight for.”
House Budget Committee Chairman Dirk Deaton, a Republican from Noel, speaks March 3 during debate on the fiscal 2025 supplemental appropriations bill (Tim Bommel/Missouri House Communications).
Deaton said he will be working toward a fixed total for spending and every item approved will have to stay within that amount.
“I’ve never known of a budget year where you end up where everybody’s universally well pleased and happy,” Deaton said. “So it’s not just a question of what we can do this year. We’ve got to make sure we’re thinking about next year and the trajectory of the state budget.”
After the Senate votes on the operating budget bills, the Senate Appropriations Committee must work on its version of the two capital spending bills, plus the bill reappropriating funds received from the American Rescue Plan Act.
Kehoe recommended $954 million for the capital bills and $2.7 billion for the reappropriation measure. The House boosted the capital bills to $1.03 billion and trimmed about $100 million from the reappropriation bill.
Lawmakers have until May 9 to finish work on the budget.
Revenue picture
The full list of earmarks added to the budget in either chamber, if approved for the final budget package, would cost $736.4 million, including $597.8 million in general revenue.
With a historically high fund balance — the general revenue fund balance on March 31 was $3.7 billion, with another $1.5 billion in funds that can be spent like general revenue — paying for those items is not a question.
But with the House pushing for a tax cut on capital gains income, revenues lagging behind estimates and uncertainty for federal matching funds in programs like Medicaid, the question is how long the surplus will last.
“Right now is the time to get it in, because I don’t think in the next few years we’re going to have the revenue or the federal dollars,” said state Rep. Adrian Plank, a Columbia Democrat who can claim credit for three earmarks in his district to help small towns with wastewater and flooding issues.
Kehoe proposed using almost $16 billion in general revenue in the coming year for operations and capital needs. The plan approved in the House uses $15.2 billion. The Senate operating budget calls for $15.7 billion in general revenue spending with the total for capital needs yet to be set.
All three versions of the budget would require a substantial amount of surplus funds to supplement current revenue.
The consensus revenue estimate issued in December forecast that the state will take in $13.56 billion during the fiscal year that starts July 1. The estimate also forecast that revenues in the current year would be $13.35 billion.
Both predictions may be hard to meet. Through April 22, the last date available, state revenues are down 1.65% for the year, a trend that would realize only $13.2 billion in revenue and, based on the forecast growth rate, $13.4 billion in the coming fiscal year.
State Rep. Del Taylor, a St. Louis Democrat, is surrounded by other members of the Democratic caucus as an April 3 news conference about the Missouri state budget (Rudi Keller/Missouri Indepenent).
State Sen. Adam Schnelting, a St. Charles Republican who saw a small tax cut bill he sponsored for National Guard soldiers balloon to a $1.7 billion general tax cut in a House committee, said the urge to cut taxes should be accompanied by reduced spending.
“There’s always so many different pet projects, and I know sometimes that there are legitimate needs and concerns, that’s part of the process,” Schnelting said. “But the bottom line is, we just have to start cutting. That’s what my own caucus has to understand — long term, we have to ensure that with our tax cuts, we also cut the size of government.”
If Missouri has a strong economy, revenues should allow for lawmakers to insert local priorities into the budget, said state Rep. Del Taylor, a St. Louis Democrat who sits on the House Budget Committee. Legislators are elected to take care of constituent needs, he said.
“That is the job of the House of Representatives, to bring forward those types of projects,” Taylor said.
Funding big items like the increase for the school foundation formula and earmark projects can be done responsibly, Hough said.
“We’re not spending everything we have in the bank waiting on the next round of income tax and corporate tax and everything else to come into the state coffers to make sure we’re OK for next year,” Hough said. “We’re still carrying over more money this fiscal year to next fiscal year than we ever used to when I was in the House.”
Earmark transparency
Each earmark added to the budget is identifiable because it has language directing it to a particular place, usually defined by population or political status, or organization, using language that only identifies one possible recipient.
The footbridge, for example, is identified as being “approximately five hundred sixty-two feet long” and located in a city that can only be Springfield. The refugee support funding is intended for an “a non-profit organization established in 2018.”
And, with work, most can be assigned to a legislative district. But none are publicly identified with the name of the legislator requesting the funds, or if it is added at the urging of a state institution like a university or a lobbyist for a private concern.
For the most part, lawmakers like it that way.
“As a member of the minority party, oftentimes I get my things done when a member of the majority is willing to do it, or when the chairman is willing to do it himself,” said state Rep. Betsy Fogle of Springfield, the ranking Democrat on the House Budget Committee. “And I know that sometimes there’s a motivation for Democrats to not have public wins.”
House Majority Leader Alex Riley, a Republican from Springfield, said lawmakers who secure money for local projects are rarely reluctant to make it known.
“What we see in practice is when you have members that bring home something for their district that they’re proud of, most of the time those members will talk about that publicly,” Riley said. “That’s not usually something that they hide from.”
In the House, a three-step budget process, with subcommittees making recommendations in specialized areas, followed by the full House Budget Committee and floor action, there is somewhat more transparency.
For example, Taylor asked for the three water projects, costing $1.9 million total in Plank’s district in a subcommittee meeting and said he was doing so on Plank’s behalf. The subcommittee recommendation was not adopted by the full committee, but they are included in the Senate budget plan.
Plank wasn’t aware that the $1 million for sewer upgrades in Harrisburg, the $500,000 for stormwater control in Sturgeon and $400,000 for a floodwall in Rocheport were in the Senate plan.
“I’ve got the most rural district of any Democrat in the state, so when they have issues, they can’t grow, and they have issues that we can solve that will make them grow,” Plank said. “At that point, it doesn’t matter what party you represent, it’s about supporting your communities.”
Both Sturgeon and Harrisburg are about the same size they were in 1980, while Rocheport has lost 25% of its population. During that time, Boone County has grown in population by more than 80%.
One of the few earmarks directly sponsored into the budget by a floor amendment would use $900,000 of general revenue for a road project at Missouri Route 185 and Strange Drive in Washington County. State Rep. Mike McGirl, a Republican from Potosi, had to first win a $900,000 cut to prescription costs in the Medicaid program to finance his road project.
It was cut in the Senate.
The location where the work will be done is a dangerous dip in the road, he said. And he hopes to get the money back from the conference committee.
“That’s not the final product yet,” McGirl said. “There’s going to have to be some negotiations in there.”
McGirl’s fight for his amendment is the exception. Most items added in the House, and all items added in the Senate, were done by committee chairmen fulfilling requests made to them in private.
During the session, their offices are generally the busiest with visitors seeking favors.
Hough said he sees no reason to change the system.
“Folks do a pretty good job of keeping tabs on what they’re following and what they’re trying to accomplish,” Hough said. “And for the most part, when this all gets done, they go and say, ‘look what I did.’”