JEFFERSON CITY - Missouri will need to restructure the very nature of Missouri government, the House Budget Chairman predicted Tuesday after a series of private meetings between the governor and legislative leaders.
House Budget Committee Chairman Allen Icet, R-St. Louis County, and the committee's senior Democrat -- Rep. Chris Kelly, D-Columbia -- both said that between $400 million to $500 million would have to be cut from the governor's spending plans for the 2011 fiscal year that will begin July 1.
A cut of that magnitude would be of generational historic proportions. It's in the same magnitude as the entire state appropriations for the University of Missouri System.
Although Icet said he did not expect institutions to close, he predicted that the size of the cuts are such that it will "change the nature of state government."
The governor held separate, private meetings with House and Senate legislators in single-party sessions Tuesday to discuss the state's budget situation.
"The governor's budget is predicated on at least $500 million that does not exist," said Sen. Kurt Schaefer, R-Columbia. "The governor did acknowledge that we do need to see a large scale remaking of government, but didn't offer any proposals."
The budget shortfall stems from increasing doubt that Missouri will get all of the federal funds projected in Nixon's budget along with a steeper decline in state tax collections than the administration and legislature had predicted.
Nixon's legislative sessions came on the same day the administration released revenue collection figures for February showing that state tax collections continue a double-digit percentage slide.
February revenue declined nearly 15 compared to February of last year. Total revenue collections for the first eight months of the budget year are 12.7 percent off last year's mark -- a $600 million lower than the prior budget year.
In January, the administration had predicted only a 6.5 percent drop for the current budget year.
Besides the state's tax collection declines, $300 million of federal funds in next year's budget came into jeopardy, when a U.S. Senate jobs bill did not include federal stabilization funds that Nixon counted on in next year's budget. A previous jobs bill in the House of Representatives did include those funds.
President Pro-Tem Charlie Shields, R-St. Joseph, said Missouri likely will not get that $300 million in federal economic recovery funds. funds
"It continues to worsen," Shields said of the state's overall budget situation. "There were no concrete plans that came out of [the caucus] as to what we're going to do."
Shields said once revenue estimates are finished, Nixon can decide which programs will lose money or be cut. He said the revenue estimates will be available in several days.
Although Nixon met with senators, Shields said he did not have definite plans to solve the budget problems.
In the meeting, Schaefer said Nixon is looking for areas of government to consolidate or cut back to help with the budget deficit. Schaefer also said Nixon mentioned possibly consolidating state vehicles into one agency, consolidating all state lab work in one agency and removing state holidays.
Schaefer said small cuts like these would not be enough to address the budget issues, and would only alleviate around $10 million from the deficit.
"I applaud the governor for reaching out to us, but we really didn't hear much about the solution to the governor's balanced budget problem," Schaefer said. "If this is the first step -- dialog -- I think that's good. I certainly hope though that the governor doesn't think that coming and speaking to us and pointing out what we already know and then not offering solutions is going to be the end of it."
"We will need to downsize the scope of state government, while protecting necessary services to the citizens of Missouri," Nixon said in a written statement issued by his office Monday.
Nixon called for a bipartisan approach to solving the budget deficit.
The meetings with Senators and House leaders marked an apparent shift in Nixon's approach to legislators on the budget situation. On Saturday, Icet said he had not spoken with Nixon about the budget since June 2009.
Icet and others who attended the governor's meetings said the next step will be for the administration and legislative budget leaders to agree on a revised estimate of for revenue collections -- called a Consensus Revenue Estimate -- so they know exactly how much must be cut from the governor's spending plans.
Then, each side can prepare lists of proposed cuts. Both Icet and Kelly said that process had to be done in private with a unified, bi-partisan public agreement.
"When you're looking at say 400 or 500 millionish in that order of magnitude, no one wants to take the lead on this and be out there by themselves," Icet said Tuesday night.