Yesterday the Missouri House endorsed a mid-year budget bill that included $22 million to “offset a shortfall in basic school aid that has occurred partly because casino tax revenues have come in short of projections.” Last month, Gov. Nixon called for twice the amount, saying the initial budget overestimated revenue available from riverboat gambling, lottery and other revenues.
That may very well be, but it’s not the reason education isn’t fully funded in Missouri. The increase in Social Services spending is.
In 1990, according to data from Michael Rathbone at the Show-Me Institute, DESE’s budget was $2,199,135,321, or 28.47 percent of the total budget. Social Services received $1,575,512,175, or 20.39 percent of the total budget.
In 2013, DESE received $5.3 billion, or 22.30 percent, while Social Services received $8.2 billion, or 34.23 percent of the budget.
According to Rathbone, $6.9 billion, or 84.5 percent of Social Services’s spending was on Medicaid.
Since 1990, as a greater percentage of the total budget was given to Social Services, a smaller percentage was given to DESE. Overall, the total budget grew larger, as did the amount given to education and moreso, Social Services.
In 1994, Missouri began spending more on the Social Services budget, and we never looked back.
From 1990 to 2013, Social Services spending in Missouri jumped from $1.5 billion to $8.2 billion, a 422 percent increase. Meanwhile, spending on DESE during the same time increased from $2.1 billion to $5.3 billion, or 152 percent.
During that same period, the General Revenue increased from $3,883,284,804 to $8,013,807,330.
Medicaid spending isn’t fully funded by the federal government. They pay about $.60 for every dollar. So, for every dollar increased in Medicaid spending, Missouri is on the hook for $.40.
Despite the increase in the General Revenue, because of Medicaid spending, money which should allow Missouri to fully fund the foundation formula was unavailable.
It isn’t a shortfall of gambling revenue that’s limiting the state’s ability fund education. It’s the leviathan that is Medicaid.
Let’s not pretend expanding it won’t cost the state more in the long run.