Missouri Gov. Mike Parson proposes massive new spending, fueled by federal dollars

Gov. Mike Parson is proposing massive new spending on a slew of priorities from pensions to higher education, saying Missouri has a “historic” opportunity to invest in the future of the state.

The Republican governor delivered the State of the State address on Wednesday, calling for nearly $12 billion in new spending for the budget year that begins July 1, much of it fueled by robust tax collections and federal pandemic aid.

The state’s total operating budget would jump from $35 billion to $47 billion under his budget proposal, though Parson’s aides caution much of the increase would go for one-time projects. The vast majority of the additional spending would be paid for with federal dollars.

Universities and community colleges would receive an additional $52 million and $105 million would go toward building a new crime lab in Jefferson City. The state employees pension system would get an extra $500 million.

The budget would put $228 million toward a 5.5% salary increase Parson is asking lawmakers to approve for state workers, among the nation’s lowest paid, who are quitting in large numbers. The spending plan also provides $22 million for school districts that want to boost teacher pay to a minimum of $38,000 a year.

“Our economy has nearly fully recovered, and we have the opportunity to make fundamental improvements to our state that will serve Missourians now and into the future,” Parson said.

But Parson’s forward looking vision comes as Missouri remains in the throes of a COVID-19 surge that has sent hospitalizations to their highest point since the pandemic began two years ago. Large school districts are facing closures this week because of staffing shortages.

More than 3,700 virus patients were being treated in Missouri hospitals this week, according to data compiled by The New York Times. Nearly 17,000 Missourians have died since early 2020.

The governor wants to use $400 million of federal funds to maintain the state’s pandemic response, including purchases of personal protective equipment, emergency staffing, testing, vaccines and monoclonal antibody treatment sites.

Still, this month Parson allowed a long-running state of emergency to expire, effectively moving Missouri out of a crisis footing. Parson, who never issued a statewide mask order and resisted federal vaccine rules, touted the state’s lack of mandates over the past two years.

“And when it comes to COVID-19 mandates, I firmly believe that the people should have a say through their local elected representatives and not be dictated by needless executive action or any one person,” Parson said. “That’s why I don’t support and have never supported mandates and Missourians can rest assured that my position will not change.”

Democrats scolded Parson in response, accusing him of prematurely claiming victory over the pandemic as the virus is spreading fast enough to force some schools to close.

“When it comes to fighting the pandemic, the governor’s hands-off approach continues to extract a hefty toll,” House Minority Leader Crystal Quade, a Springfield Democrat, said.

In his speech, Parson leaned into the state’s economic strength, proclaiming that Missouri has a “solid foundation” and noting an unemployment rate of 3.5% that’s lower than before the pandemic. He complained that success can get “purposely overshadowed because positive news doesn’t sell headlines” — a comment underscoring Parson’s often combative relationship with the news media.

As Parson seeks to move the state past the pandemic, he is in an unusual position for a Republican governor in calling for large spending increases. His aides emphasized much of the spending is one-time dollars.

“We are very confident that we have enough ongoing revenue to sustain that spending,” Budget Director Dan Haug said. “But one of the things we didn’t want to do in this is spend a bunch of one-time money on ongoing programs and cause a cliff in the future.”

Parson is also proposing putting away $281 million into a rainy day fund to avoid cuts in tighter budget years.

Thursday’s speech marked Parson’s return to the House chamber, after he delivered the State of the State in the Senate last year because of a last-minute venue switch during a COVID outbreak. The governor perceived the switch as a slight, leading to a fiery letter sent to House Republicans that brought tensions between Parson and the chamber’s GOP leaders into public view.

Some Republicans, who often preach the importance of small government and returning extra revenue to taxpayers, sounded notes of caution about the spending proposals while not definitively ruling anything in or out.

Senate Majority Leader Caleb Rowden, a Columbia Republican, said the scope of the spending proposed gave him pause. He said it’s a matter of figuring out how the dollars can be invested to have a long-term impact.

“Limited government isn’t no government. It’s just investing in the right ways and in the right moments,” Rowden said.

Democrats appeared mostly pleased with the budget, though they stressed that much of it relies on federal dollars that were approved by a Democratic-controlled Congress and signed into law by Democratic President Joe Biden. Quade, who noted Democrats met with Parson on Tuesday, expressed concerns about the General Assembly ultimately approving Parson’s spending priorities given traditional conservative opposition to big spending.

Parson’s budget would fully fund Medicaid expansion, for example, even though some Republicans want to withhold funding for expansion, which voters approved in 2020. After the legislature refused to pay for it last year, the Parson administration was ordered by the courts to enroll the newly eligible population anyway.

Funding for the roughly 275,000 low-income Missourians the administration expects to sign up is included in next year’s budget. As of last week more than 57,000 have been enrolled.

“Instead of having to ask for additional funding for these things that we deeply care about, we are going to be defending the governor’s budget in a lot of those places,” Quade said.