Jefferson City (August 19, 2011) – State Auditor Tom Schweich today released a letter to Gov. Nixon questioning the process by which the governor is withholding in excess of $170 million from the current legislatively-approved fiscal year budget.
As part of the ongoing regular audit of the governor’s office, State Auditor Tom Schweich and his staff of accountants and attorneys examined the legal and accounting basis for the governor’s decision to withhold more than $170 million of funds appropriated by the Missouri Legislature for programs such as community colleges, children’s services, courts and judges, the University of Missouri, senior health programs and others. The state auditor has determined that, when the governor decided to withhold funds from these programs, there was no basis in the Missouri Constitution, law or accounting for doing so. Because of the urgency of the situation, Auditor Schweich today sent a letter to the governor asking that he conduct his activities in a manner that comports with sound accounting and legal principles.
The stated basis for the governor’s withholding from these programs is that funds need to be available for relief efforts in Joplin and other areas of Missouri struck by natural disasters over the last few months. We do not question the need for state assistance in affected areas; it is critical. However, the approach chosen by the governor is problematic.
Our analysis is as follows: under the Missouri Constitution, the governor may withhold funds appropriated by the legislature if there is an actual shortfall in state revenues below the amount on which appropriations were based. The governor’s budget director was unable to provide the auditors with accounting data of any kind to support the more than $170 million in withholdings; they produced no projections, spreadsheets, studies or analyses to justify the withholds. In fact, the governor made his decision to withhold more than $170 million from the fiscal year 2012 budget before the fiscal year even began. Moreover, disaster recovery costs are generally incurred over many years, providing ample time to get the Legislature involved before large expenditures must be paid.
Finally, the Missouri Constitution allows withholds when actual revenues are less than the revenue estimates upon which the appropriations were based, not when there is an increase in unappropriated costs, as has occurred because of the disasters. We encourage the governor to work with the Legislature and consider the various lawful options available to them. These options include, but are not limited to, utilizing the $159 million revenue surplus from fiscal year 2011; working through the supplemental budget process; borrowing from the Missouri Rainy Day Fund; or financing these disaster recoveries in future budget cycles.
In sum, we believe the governor has exceeded his authority in making these withholds. The governor is effectively using the tragedies in Joplin and other parts of the state to circumvent the legislature so that he may pick and choose which programs to support. This is a disservice to the people of Joplin and the people of Missouri as a whole and renders the members of the Missouri Legislature, the representatives of the people, irrelevant.
Last month, the state auditor had a very productive meeting with Joplin officials to discuss the way to deliver disaster relief in a fiscally responsible and legal manner. Although the Missourians affected by the natural disasters have made incredible progress toward recovery, it is a long process, and these areas will continue to need assistance. But the governor is not exempt from the rules by which other officials operate, and our letter requests that he correct his error. We expect to complete the remaining aspects of the audit of the governor’s office in the coming months.