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We’ve provided some context for Missouri’s budget and revenue, as well as outlined the state of education and health in Missouri.

So where can Missouri go from here, not only to achieve its pre-Great Recession status, but invest in its residents and provide the foundation for economic prosperity?

Three common sense policy changes would go a long way towards addressing challenges facing Missouri families and make Missouri more competitive in the future.

Create a State Earned Income Tax Credit: Boost Local Economies and Improve Outcomes for Families

A state Earned Income Tax Credit (EITC) would both improve long-term health and economic outcomes for families while boosting local communities and economies.

A Missouri EITC would bolster the pay of hard-working families, allowing them to better make ends meet and pay for necessities like car repairs, child care, or even a class. And families are spending this money in their local communities, boosting the Missouri economy at the same time.

More than 500,000 Missouri families could potentially benefit from a state EITC, depending on the structure. Click here to learn more about a state EITC.

Enact the Streamlined Sales Tax to Strengthen State Services & Level the Playing Field for MO Retailers

Missouri tax laws have failed to keep pace with a changing economy, reducing the state’s ability to invest in the well-being of its citizens. By enacting the streamlined sales tax mechanism, Missouri can level the playing field for local bricks-and-mortar businesses that are currently at a competitive disadvantage relative to online businesses because of a loophole in how sales taxes are currently collected.

This measure allows the states to simplify their sales tax laws to make it easier for online retailers to collect and remit state and local sales and use tax. Based on the experience of other states, Missouri could expect to capture between $15-$20 million in currently uncollected state sales taxes in the first full year of implementation. In addition, the U.S. Congress is considering companion legislation that would require retailers to fully comply with the state legislation. At that time, Missouri would likely capture hundreds of millions per year in currently uncollected state and local sales tax revenue.

Expand Medicaid Eligibility: Improve the Health of Missourians and Save Money for the State

Expanding Medicaid would provide essential health care coverage for hundreds of thousands of Missourians, while actually saving the state funds that can be used for other purposes. By moving people from existing state-funded services into the federally-funded Medicaid expansion, Missouri could net savings of at least $100 million per year in state general revenue dollars when the expansion is fully implemented. That amount is net of new state general revenue costs for the expanded coverage. These are real dollars that would be saved in the state’s budget and which could be used to increase funding for education or other services.

Many states have already realized these savings. A recent analysis commissioned by the Robert Wood Johnson Foundation examined actual state budget savings in eight states that have expanded Medicaid including Arkansas, Colorado, Kentucky, Michigan, New Mexico, Oregon, Washington and West Virginia. The report found that by the end of 2015 (just 1.5 years into expansion) these eight states would have experienced savings and revenue increases of more than $1.8 billion.

Medicaid Savings Across States

The Health of Missouri is at Stake

Last week, MBP highlighted where our state has been over the past decades, and how our investments in education have diminished in value over time. Today, we examine the health of our state and the implications for our future.

A healthy Missouri is a fundamental building block of a prosperous economy and a good quality of life. A healthy Missouri is one where:

  • All Missouri families can get the health care they need, so students and employees are healthy for work and school.
  • Sickness or chronic illnesses are caught early, rather than waiting for an emergency to hit.
  • A strong public health infrastructure encourages wellness and reduces communicable disease.

Yet, Missouri’s investments in critical health care services have significantly declined over the last decade. And by a variety of measures, Missouri’s health status has declined remarkably.

 

Access to Health Care

One in nine Missourians is uninsured, yet Missouri’s eligibility for Medicaid is third-lowest in the nation. In 2005, Missouri made dramatic cuts to its Medicaid program, causing 100,000 Missourians to lose their health care coverage. The cuts to eligibility remain today. As a result, parents in a family of three that earn more than $301 a month are not eligible for Medicaid in Missouri.Medicaid Eligibility MO v Nation

While Missouri’s uninsured rate dropped about 25 percent over the last two years, other states have experienced much higher declines in their uninsured rates over the same period. Nationwide, the decline in the uninsured is largely attributable to two provisions within the federal Affordable Care Act, including implementation of Medicaid expansion and state health exchanges.

States that implemented both measures averaged drops of 44 percent in the number of uninsured in their state. Passing Medicaid expansion in Missouri would close a gap in overage for about 300,000 Missourians, improving the reliability of employees for businesses, and providing a net savings of about $100 million in state general revenue annually for the state.

Coverage Gap

Behavioral Health Care Weakening

Although one in ten Missouri adults have a serious mental illness, 40 percent of those go without treatment.

Yet Missouri cut state general revenue funding for mental health services by as much as 35 percent since 2009.Mental health budget category reductions

Missouri’s spending on public mental health services at $99.40 per capita is well below the national average of $119.62 per capita.

Reimbursement rates for the Department of Mental Health’s community providers have fallen far behind inflation, making it harder for providers to maintain proper staffing and services.

If left untreated, serious mental illness can escalate and result in premature death, increased incarcerations, create burdens to county jails and law enforcement agencies, and increased costs for Missouri taxpayers.

Public Health

Missouri ranks 50th in the nation in the amount of funding it provides to public health. And the public health infrastructure is what we rely on to monitor and detect disease outbreaks.Public Health

Missouri spends less than one-fourth the amount that most other states spend on public health services. Missouri spends just $6.08 per person in state funding for public health, while the national median amount is $27.40.

In 1990, Missouri was ranked as the 24th healthiest state, but by 2014 Missouri dropped to 36th in the nation.

Investments in local public health agencies have been cut by nearly two-thirds since 2001.

Public Health Funding

Missouri must do better to invest in the health of its people. Tomorrow we’ll present ways that the Governor and Legislature can, in the 2016 legislative session, begin laying the foundation for a more prosperous Missouri future.

 

What’s at Stake in Education? Our Kids’ Futures

As we mentioned on Monday, leading up to the State of the State address next week, MBP will highlight where our state has been over the past decades, and how we can pave the way for a better tomorrow. Today’s focus is education.

We all want the best for our children. And all Missouri kids should start school ready to learn, at quality public schools that will help them reach their potential and become part of a well-educated, skilled workforce. But from early education through college, the value of Missouri’s investments in our youth has diminished, potentially jeopardizing the long-term well-being of a generation of children.

  • Decreased investments in early childhood services like Parents as Teachers, child care assistance, and preschool compromise the development of important social and cognitive skills that pave the way for the school success of the youngest Missourians.
  • By shortchanging school funding, our state is failing to meet its obligation to more than 800,000 K-12 students. It’s also passing the buck to localities, setting the stage for increased property taxes at the local level and funding disparities between school districts.
  • Cuts to funding for public colleges and soaring tuition make it hard for working families to afford a college education while trying to make ends meet.

 

Quality Early Childhood Services: Investing in a Strong Start

Quality early care and education help children develop the cognitive and social skills that help them succeed, and investments in early learning opportunities like home visits, child care, and preschool pay off for taxpayers in the long run. Unfortunately:

  • Since 2009, funding for Parents as Teachers has been cut in half. Parents as Teachers for JPG
  • Access to child care assistance for low-income families is well below the national average, ranking 49th in 2014. The number of children receiving subsidized child care has fallen, despite increased child poverty.Number Children - Child Care
  • Missouri has cut state funding for child care assistance by 35% since budget year 2008, and our state ranks near the bottom in its funding for preschool.

 

K-12 Education: Investing in Our Students

Quality public schools can give our children the start they need to pursue their dreams. But:

  • In the current school year, the state is underfunding K-12 schools by more than $400 million.
  • State funding is falling below the inflationary needs of schools. Between the 2000 and 2013 school years, state funding per student failed to meet inflationary cost increases in 5 out of 6 counties.DESE Inflation County Map
  • Local governments have had to shoulder increased responsibility for funding education in their communities. As a result, 92% of counties raised property taxes during that time, setting the stage for enhanced funding disparities among districts.Property Tax Increases by County

Higher Education: Investing in a Skilled Workforce

Those with a college degree have higher incomes and are less likely to face employment. But it’s harder for working families to afford a college education when:

  • Funding for public four year higher education has dropped since 2009, and tuition and fees have risen by nearly 15 percent.
  • Unsurprisingly, over the same timeframe, debt for Missouri students has also increased, rising by about 23 percent between 2008 and 2013.

 

But there is a better way. We’ll talk more next week about how legislators can make policy changes in 2016 that will allow our state to invest in our children’s future and lay the foundation for a more prosperous Missouri.