Tornado clean up strains Missouri budget

@CNNMoney June 16, 2011: 10:38 AM ET
Missouri Gov. Jay Nixon took $50 million from the state budget to clean up Joplin tornado.

Missouri Gov. Jay Nixon took $50 million from the state budget to clean up Joplin tornado.

NEW YORK (CNNMoney) -- The tornados, floods and wildfires that have swept across the United States are also wreaking havoc on state budgets.

In Missouri, the cost to clean up the damage from the tornado that hit Joplin in May is rippling through state government. On Friday, Governor Jay Nixon set aside $50 million in state funds to cover the cost of reconstruction in Joplin, as well as communities in southeastern Missouri that were devastated by flooding earlier this spring.

The state generally keeps $1 million in a disaster recovery account and adds to it as needed. In flusher years, such a transfer might not impact other state agencies. But in these cash-strapped times, several state departments had to suffer budget cuts to fund the Joplin clean up.

Missouri's higher education system bore the brunt of the reductions, losing $14.9 million in funding. The colleges, which had been bracing for a 5.6% drop in state aid in state lawmakers' budget proposal, will instead face cuts of up to 8%.

At the University of Missouri's flagship campus in Columbia, administrators are looking at how they can cope with the additional loss. It could mean that faculty and staff won't get raises for a third year in a row, said spokeswoman Mary Jo Banken. It could eliminate money for repairs and renovations to buildings and reduce funding to every department.

Missouri State University should weather the cuts without any major problems, said President Jim Cofer, Sr. That's due in part to an early retirement program the university offered last year that yielded significant savings.

Joplin tornado damage could total $3 billion

Nixon is also reducing the Medicaid budget by nearly $14 million because the state is expecting it will spend less than originally projected. And the judiciary will lose $6 million in funding, bringing it back to its fiscal 2011 level.

The reconstruction money is part of $172.2 million in funding that the governor either shifted or vetoed. The governor tried to limit the impact on other areas of the budget, said Scott Holste, Nixon's press secretary.

"They were minimized as much as they could be," Holste said.

But some Democrats, who are in the minority in the state legislature, said the governor could have taken the disaster funds from the $500 million in Missouri's Rainy Day fund, instead of from higher education and other departments.

"We all know we have to deal with the disaster," said Rep. Chris Kelly, whose district includes the University of Missouri. "Why shouldn't the entire state carry the burden?"

Missouri is not the only state grappling with natural disasters. Arizona is now battling the largest wildfire in state history, while Texas is contending with the worst wildfire season since it started keeping track in 1985.

Though the federal government provides assistance in many natural disasters, states can ill afford these days to pay their share to help clean up communities afterwards.

Arizona and Texas are still calculating the damage from their natural disasters and the ramifications on their state budgets.

Texas, which has spent at least $110 million since late last year fighting more than 11,000 fires, is hoping the federal government will pick up a majority of the tab. Governor Rick Perry is appealing the fed's denial of the Lone Star State's request to be declared a major disaster area.

State lawmakers agreed last month to cut $15 billion out of the budget, slashing funding for schools, universities and social services. But it also has billions in a Rainy Day fund, which state officials have said should be set aside for emergencies.

"Right now, it would be premature to guess where it will come from," said a governor's spokeswoman. To top of page

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