Nixon announces plan to cut government spending

JEFFERSON CITY - A hiring freeze and a review of construction projects were among the ideas announced by Governor-elect Jay Nixon in his proposal addressing a projected $342 million budget shortfall.

The proposal would require all government departments to submit a plan on reducing expenses, put a freeze on long term contracts for goods and services and require state departments to administer performance reviews.

Nixon's transition department did not return phone calls on whether the review of construction projects would impact buildings funded by the sale of Missouri's Higher Education Loan Authority.

Though the plan would cut government expenses and consolidate jobs, it would expand the role of the Economic Development Department, ordering it to submit reports on tax credits and evaluating which credits are generating job opportunities.

Nixon stated in a news release that his changes will help make government more efficient.

"By making tough decisions and instilling the right priorities, we will have additional resources to create new jobs, make health care more accessible, and help middle class families during these tough economic times," he state.

Former Sen. Wayne Goode, D-St. Louis County, and transition director for budget review, projected at $342 million budget shortfall Tuesday and said the crisis was "like none we have ever seen in the past."

Commissioner of Administration Larry Scepter said he disagreed with Goode about exactly how much the shortfall would be.

"My prediction would be that there would not be that much of a deficit," he said.

Scepter oversees the Office of Administration, which manages the state budget and state construction projects.

Scepter said he anticipates a lower shortfall than Goode does because the transition director assumed the state's revenue and spending would stay the same for the next seven months of the fiscal year. The commissioner expects a drop in state spending.

"If less money is spent, that generates additional lapse into the next fiscal year," he said.

Roger Lubber, financial services chief for Conservation Department, said all state departments will be dealing with the cuts in the same way.

"We'll be looking at vacant positions," he said. "We'll be looking at all expenditures to see which ones can be delayed or not done at all."

Lubber said he expects the spending cuts will effect the quality of the Conservation Department's programs.

"The goal that we have, as well as other state agencies, is to make the impact as minimal as possible," he said. "But the shortfall of revenue is significant enough that it will have an impact."

Republican Gov. Matt Blunts spokeswoman Jessica Robinson had no comment on the proposed changes.