A Missouri House budget subcommittee slashed more than $300 million from agency budgets Monday, which the chairman said is intended to align spending authority with actual spending.
Another budget subcommittee, also meeting Monday, cut $59.5 million more in general revenue from several agencies, earmarking the money instead for local projects that include several that were vetoed last year.
The Subcommittee on Appropriations – Agriculture, Conservation, Natural Resources and Economic Development went first and state Rep. Darin Chappell, the chairman, said most of the cuts target lapsed funds — money appropriated but not actually spent — and should have no impact on agency operations.
Other cuts, he said, target earmarked funds that agencies say they do not need and did not request.
“Our job is to go through and find out where the money is being spent, where it’s actually going, and what it’s returning on the investment,” said Chappell, a Republican from Rogersville. “There is no ability for us to exercise legislative oversight if the budget is so muddied that we cannot see where the funds are actually going.”
The subcommittee was the first of five that are recommending changes to the $53.7 billion budget submitted in January by Gov. Mike Kehoe. When they are finished, the full House Budget Committee will decide whether to accept the changes as part of the spending plan sent to the House for debate.
Subcommittees meeting Tuesday will make recommendations for funding education, social services and health programs, among others.
The budget, which must be completed one week before the session ends, is moving faster than many recent years. The House gave first-round approval Monday to a $2 billion supplemental spending bill for the current fiscal year, which includes $14 million for Area Agencies on Aging, which could run out of funds for senior meals and transportation by the end of the month.
Both subcommittees meeting Monday made cuts based on lapsed funds. Unlike Chappell’s subcommittee, which did not spend its cuts in other areas, the Subcommittee on Appropriations – Public Safety, Corrections, Transportation and Revenue redirected most of its cuts to earmarks.
During fiscal 2024, which ended June 30, lawmakers appropriated $52.4 billion for day-to-day operations of state government but agencies only spent $41.1 billion, or 78.4% of the total.
The cuts approved in Chappell’s subcommittee include:
• $280 million from Department of Natural Resources water and energy projects. Most of the cut, $250 million, is from water infrastructure grants and loans, where between $405 million and $695 million has been unspent in each of the past three years.
• $15 million from the Department of Economic Development, with $9.6 million from a program to promote pharmaceutical ingredient manufacturing and $5.4 million from a program to promote semiconductor manufacturing. Both items were added as earmarks in last year’s budget.
• $20 million from administration at the Department of Labor and Industrial Relations.
The water infrastructure grants and loans are financed with dedicated funds that cannot be spent anywhere else.
“Is DNR ok with this or not?” state Rep. Jim Kalberloh, a Republican from Lowry City asked Chappell.
“Probably not,” Chappell replied. “I’ve talked to them, and I’m sure I’ll be talking to them very shortly here.”
The $15 million cut to the Department of Economic Development was on a list of items, totaling $144 million, that Chappell said the agency did not request or want.
“They’ve been moved around the budget, and I’m going after all of them,” Chappell said.
The $9.6 million grant was included last year for the University of Missouri-St. Louis to partner with a not-for-profit to develop processes for making pharmaceutical ingredients that are mainly made overseas. The $5.4 million was directed to the university’s Columbia campus to promote computer chip manufacturing in the state.
When departments point out places where they have excess spending authority or unwanted earmarks, the subcommittee’s job is easier, Chappell said.
“If the departments would bring me the squishy stuff, I’m happy to not dig into the heavier stuff if I don’t have to right away,” he said.
The general revenue cuts made in the second subcommittee to meet, chaired by Republican state Rep. Donnie Brown of New Madrid, were generally less than $1 million from any single budget line. The exceptions include $30.7 million for rail grade crossing improvements and $4 million from a transportation cost-share program.
The 32 earmarked items added include $1.15 million for grants to 16 volunteer fire departments, as well as $37.5 million for projects vetoed last year, including $8 million for a police training facility in O’Fallon and $5 million for the New Madrid Port Authority.
The subcommittee also tapped the state Highway Fund to earmark $88 million for improvements to U.S. Highway 412 in the Bootheel and $100 million for rural routes.
Brown’s subcommittee also recommended a major change in the language controlling how $1.4 billion of state tax funds are used for highway improvements. When first set aside in 2023, the money was part of a $2.8 billion plan for widening Interstate 70.
The language change, proposed by state Rep. Don Mayhew, a Republican from Crocker, would make the money generally available for any road project.
Very little of the $1.4 billion has actually been spent because current work is being financed with bonds. The original set-aside has grown by $40 million because of accrued interest.
The change means the Missouri Highways and Transportation Commission may keep the money in the I-70 project or redirect it, Mayhew said.
“We have a new (federal) highway act that will be coming out in the next couple of years, and we will need significant match money to be able to achieve some of the things, the goals that are going to be directed to us,” Mayhew said.
In an interview after the subcommittee meeting, Chappell said he will continue to push to reduce lines where a substantial amount of money isn’t being spent.
“When I see it year over year over year, they’re clearly not spending it, and that budget should reflect what we’re actually doing,” Chappell said.
During the subcommittee meeting, Chappell said he will listen if departments show why the money should remain in the budget.
“If I see any department that has lapse year over year over year, and I suggest that half of that be pulled away in appropriation authority, it’s not the equivalent of me trying to sacrifice somebody’s child on the courthouse steps,” he said, “but I’m open to discussion when the hearing is over.”
