Words and Light

This morning, Budget Director Linda Luebbering and the governor’s senior financial adviser Paul Wilson held a state budget overview with a few members of the State Capitol press corps.

I don’t intend for this blog to become a political news blog like The St. Louis Post-Dispatch’s Political Fix or The Kansas City Star’s Prime Buzz. That’s just silly — this blog doesn’t get nearly the readership that either of those does, and this is supposed to be a journalism/photography blog.

But in the interest of transparency, I do want to lay out a few details about the American Recovery and Reinvestment Act of 2009 and its impact on Missouri’s state budget.

• FOR FULL DETAILS: I scanned and PDF’ed the 13-page briefing the Budget Office provided to reporters today. I have no qualms with sharing this document on-line because the meeting was completely on the record. Click HERE for the 13-page briefing on the federal stimulus package and how it affects Missourians. (I apologize for the random notes and scribblings on several pages.)

In summary, the federal stimulus package will provide Missouri with at least $4 billion. Several more millions — if not billions — of dollars can be acquired through certain provisions of the stimulus package. I’ve outlined the package very loosely, below. Again, FULL DETAILS can be found in the 13-page document I scanned.

Funds from the stimulus package are channeled through three categories, plus two other components (which I’ve also listed as categories) that can benefit Missourians.

• CATEGORY I: Budget Stabilization Funds

Made up of less than 10 percent of the entire stimulus package, this pot of money is one of the most controversial because of the many stipulations placed on the use of its funds. Basically, this fund is designed to help state governments avoid cutting from their education and Medicaid budgets.

A total of $2.171 billion has been allocated to Missouri for state stabilization purposes. $921 million is designated for education funding, with 81.1 percent ($753 million) specifically for direct education support and the remaining 18.2 percent ($168 million) for other expenditures such as renovations and public safety.

$1.25 billion has been designated for Medicaid reimbursements, but Missouri cannot use any of the funds if the state alters its Medicaid eligibility rules. No funds appropriated for FMAP (Federal Medicaid Assistance Percentage) can be put into a reserve or rainy day fund.

• CATEGORY II: Existing Federal Program Funds

Using pre-existing formulas and rules, the funds in this category will go almost directly from the federal government to existing federal programs. Examples include transportation (some of which is handled by local/municipal authorities), worker (re)training, law enforcement funding, food stamps, etc.

Federally, this category draws about 25 percent of the $787 billion in the stimulus package. For Missouri specifically, about $1.829 billion is allocated to this category. See the 13-page document (pgs. 3-5) for more details about which programs are listed and how much is appropriated to each.

• CATEGORY III: Competitive Grants

This is where Missouri — and other states, for that matter — can really draw in the big bucks. The previous two categories are where the overall $4 billion number comes from. But this category, which occupies about 1/3 of the stimulus funds, allows states to compete for extensive grants in order to boost their economies.

These hundreds of billions of dollars available for whichever states are most competitive are the basis of Gov. Jay Nixon’s “Transform Missouri Initiative,” which he announced on Wednesday during a press conference.

• CATEGORY IV: Tax Relief

A good chunk of the stimulus package is “committed to individual and business tax breaks” (pg. 8 of the 13-page overview document). This is to provide incentive for job creation, etc.

• CATEGORY V: Enhanced Economic Recovery Financing Tools

This category addresses mostly larger businesses, by enhancing financial tools such as bonds and tax exemptions.

For further reading: Here’s my article from Thursday’s Columbia Missourian. It’s a general explanation of the above (with fewer details, because those details were not available until today) and includes some commentary from Sen. Gary Nodler, R-Joplin; Rep. Allen Icet, R-Wildwood; and Sen. Jason Crowell, R-Cape Girardeau.