Issue Areas |
May 1, 2009March 2, 2010Federal and State Policy Update Missouri Budget ProjectMay 1, 2009In this issue:State 1. Budget process grinds forwardHBs 1-13 The Budget Conference Committee canceled its Friday meeting and will reconvene on Monday, May 4 at 1 PM in the Third Floor Legislative Library. At this point in time it appears that funding for subsidized child care in HB11 and HB21 (if passed by the Senate) will allow services to be continued at the current level. Presumptive eligibility is funded at the House proposal, which is a $300,000 cut from the Governor’s $3.3 mil request. There is currently no expansion of SCHIP coverage. Health insurance for low income families has not been decided (see 3. Below) HBs 21 and 22 HB22 was perfected by the House on April 29, but was defeated in its final vote on April 30. A number of legislators changed their vote after considering the negative effect that HB22 may have on next year’s budget and funding for critical services. HB22 appropriated $403 mil for the coming fiscal year (FY2010), and $151 mil for FY2011. The entire budget process is chaotic, and it appears likely that a special session will be needed to come to an agreement about the budget for FY2010. 2. Status of Tax Bills that would greatly affect General Revenue and servicesHJR36 (Emery), was heard by the S Ways and Means Committee on April 29. There was broad opposition to the bill and the hearing will continue next week. As previously reported, the Missouri Budget Project opposes this bill. By replacing personal and corporate taxes with an increased sales tax, Missouri’s tax system would become more regressive, produce less stable and more inadequate income. It appears that HJR36 will not pass this year. HCS/SCS/SB71 passed the House on April 30. Budget Chair Allen Icet amended his proposal to cut income taxes by $1 billion over two years to HCS/SCS/SB71 (Stouffer). The original intent of the bill was to provide tax credits for donations to programs that serve individuals with a developmental disability. According to the fiscal note, the cost of the tax credits are “unknown”. Icet’s provision lowers the tax rate from 6 to 5.5 percent. The estimated cost is $463 mil (per the current fiscal note) in General Revenue in FY2010. A floor amendment passed that makes the tax cuts permanent, rather than for just 2 years. The Missouri Budget Project strongly opposes SB71. In addition to reducing revenue at a time when funding is needed to support vulnerable Missourians and critical services, the benefits of the tax cut go primarily to wealthy Missourians. According to an analysis by the Institute for Taxation and Economic Policy (April 2009), the 40 percent of Missourians with incomes under $30,000 will receive only 5 percent of the total tax cut benefit. Missourians in the top 20 percent of income will receive 67 percent of the total benefit, and 22 percent of the benefit will go to those with the top 1 percent of income. 3. Status of health care for the low income uninsured remains unknownThe Governor’s proposal to insure low income parents with incomes up to 50% of FPL is in limbo. Money to fund this is currently in HB11, but the language of the proposal has been removed. It is not clear what this will mean. SB306 (Dempsey) is still in the House Special Standing Committee on Health Insurance. It proposes providing insurance for low income Missourians, but uses a complicated system of Health Savings Accounts, and has some other provisions that are troubling. (See updated analysis on our web site www.mobudget.org.) We are in the process of analyzing the House Committee Substitute, and it is likely that there will be additional amendments before the bill moves from Committee. For more information regarding the issues in this update, please contact one of the MBP staff.Amy Blouin, Executive Director Ruth R. Ehresman, Director of Health & Budgetary Policy Tom Kruckemeyer, Chief Economist Heather Lasher Todd, Communications Director |
