Budget and Taxation

“The function of education is to teach one to think intensively and to think critically. Intelligence plus character – that is the goal of true education.”  Martin Luther King, Jr.

Last week, the Senate completed its version of the 2019 fiscal year budget. It will now go to conference committees to reconcile differences between the Senate and House of Representatives and will then return for a final vote. Once again this year, the cost of state government has gone up – this time to approximately $28 billion. Just under $10 billion comes directly from your state taxes. Twenty-eight billion dollars is over $4,600 per Missourian or almost $6,000 per tax payer. That does not include federal or local taxes. It also does not include the approximately $7.9 billion in under-funded pension liabilities which is another $1,300 per Missourian. I don’t know where this ends, but with Medicaid costs increasing from $300 to $400 million a year, something must be done.

The Senate budget would provide K-12 education an additional $68 million this year over last plus $25 million in transportation dollars unless that lobby can convince the conference committee to increase it. That’s a combined increase of approximately $1,400 per classroom. Total spending is about $10,000 per student per year or roughly $140,000 per classroom. There may be some concern that even though the student enrollment has fallen every year for the last five years, the budget keeps increasing.

Last weekend, I was in Michigan as a member of the American Legislative Exchange Council (ALEC) Tax and Fiscal Policy Task Force. We heard from a number of think-tanks as well as legislators from other states. One especially encouraging panel discussion described the “Michigan Comeback.” According to the panelists, Michigan had been an “economic basket case” for over a decade. They were rated dead last according to “Rich States, Poor States,” an economic competitiveness index. Today, however, after major reforms that included removing over 2000 regulations, cutting business taxes, passing Freedom-to-Work and reforming their pension system, they are celebrating the largest private sector job growth in the Great Lakes region. In the last seven years, Michigan’s per capita income has grown by 28 percent or $10,000 per year per individual. Michigan’s population is growing for the first time in almost 20 years. Michigan is about 1.7 times the size of Missouri, and given their success, maybe we should enact more of their reforms.

As an ALEC State co-chair, I am always challenged and encouraged by the policies shared at ALEC summits, forums and annual meetings. Missouri has a platform for sharing our successes with other state lawmakers and the opportunity to learn about the public policy successes and the failures in other states. ALEC’s principles of Limited Government, Free Markets and Federalism set a course that consistently leads toward individual and collective prosperity.

Thank you for reading this legislative report. You can contact my office at (573) 751-2108 if you have any questions. We welcome your prayers for the proper application of state government.