By Rudi Keller & Steph Quinn
MissouriIndependent.com

Missouri lawmakers reached a compromise budget Monday that includes no increases in basic state aid to public schools or higher education.

As a result, lawmakers will not fund the $190 million cost of a 2024 education law as requested by the Department of Elementary and Secondary Education. For community colleges and state universities, the agreement avoids an immediate shift to an enrollment-based funding plan that could have cut some schools by 40% or more.

Over about six hours, House Budget Committee Chairman Dirk Deaton and Senate Appropriations Committee Chairman Rusty Black led negotiations with lawmakers assigned to work out differences between the House and Senate spending plans. Their decisions were largely accepted and rarely changed when challenged.

Final figures were not available late Monday, but the final spending plan for the fiscal year beginning July 1 is expected to fall between the $50.8 billion approved by the Senate and the $52.4 billion approved by the House. General revenue spending will be about $16 billion, requiring up to $2.4 billion from surpluses accumulated between 2021 and 2023 to cover expected revenue shortfalls.

In January, Republican Gov. Mike Kehoe proposed $54.5 billion in total spending and $16.3 billion in general revenue appropriations.

“We are still well below what the governor proposed,” Deaton said after the budget work was finished.

The general revenue fund balance, which once stood at $5.7 billion, was down to $2.9 billion at the end of April and is expected to be nearly exhausted by the end of the coming fiscal year.

Deaton and Black said final votes are expected Wednesday, two days ahead of the constitutional deadline to pass spending bills.

Major elements of the final budget include restoration of child care subsidy increases sought by Kehoe and cut by the House, reversal of proposed cuts to services for adults with developmental disabilities, no general cost-of-living pay increase for state employees, a shift of some technology jobs to the Department of Social Services and a $10 million increase for MOScholars tuition vouchers.

The foundation formula, Missouri’s main public school funding program, would receive the same $4.3 billion appropriation approved this year. Democrats argued the $190 million needed to fully fund the formula was available through a combination of funding sources.

“Here’s an opportunity here to be able to do both,” said state Sen. Maggie Nurrenbern, a Democrat from Kansas City. “And so I would just ask that the conference committee really consider that if we can do both.”

The deal reached by Deaton and Black trimmed amounts from different funds and included a more optimistic forecast for Missouri Lottery revenues than the Senate plan used.

If lottery revenue exceeds expectations, it could be provided to schools in a supplemental spending bill next year or saved for future years, Black said.

The House plan for higher education would have placed $184 million in community college funding and about $820 million in support for four-year universities into pools redistributed by enrollment. Some institutions would have faced major cuts, including Truman State University, Harris-Stowe State University and Lincoln University.

While that plan did not survive, lawmakers attached language directing the Department of Higher Education and Workforce Development to present a formula for reallocating state funds by Dec. 1.

The MOScholars program ended the day’s debate because it is funded through the state treasurer’s office, which is funded near the end of the budget process. The additional $10 million was one of the few large discretionary increases in the budget. Most Democrats on the conference committee opposed the increase.

“I am perpetually and continually concerned about this march toward privatization,” said state Rep. Betsy Fogle, a Springfield Democrat.

State Rep. Marlene Terry, a St. Louis Democrat who supports the program, said it gives students opportunities they otherwise may not have.

“If I had my way, I would ask for more than $10 million,” Terry said.

The budget also restores $51.5 million in cuts to the state’s child care subsidy program proposed by the House. The funding allows providers to receive payments based on enrollment, though not at the beginning of each month.

The restored money also allows for additional rate enhancements for providers pursuing accreditation, serving children with special needs or serving predominantly low-income families.

Lawmakers also included a plan to transfer $57 million and 168 employees from the Office of Administration’s statewide IT team to the Department of Social Services. The change is intended to give the department direct responsibility for implementing federal changes to welfare programs, including food stamps and Medicaid.

“With those deadlines, we determined that it would be best to put that IT development in the department, where they have the most to gain but without a doubt the most to lose if that IT is not successful,” Black said during Senate debate last month.