Missouri Independent: State budget loaded with earmarks nears deadline for action by Missouri Gov. Mike Parson

State budget loaded with earmarks nears deadline for action by Missouri Gov. Mike Parson

by Rudi Keller, Missouri Independent
June 27, 2024

For years, state Sen. Mike Moon has railed against the unfairness of businesses being told they owe money when the Missouri Department of Revenue revises the list of things covered by the state sales tax.

That happened after 2008, when the Missouri Supreme Court ruled that fitness clubs were places of “amusement, entertainment or recreation” and must charge tax on memberships and class fees. Audits subsequently resulted in tax bills for thousands of dollars that businesses struggled to pay.

Moon has filed bills seeking to force a refund and this year, for the second time, has secured an earmarked appropriation of $38,000 to refund the money paid by a Kansas City fitness club owner. Gov. Mike Parson vetoed a $150,000 appropriation for the same purpose in 2021, arguing that the proposal violates the state Constitution’s ban on “refunding money legally paid into the treasury.”

Moon, in an interview with The Independent, said he won’t be surprised if it happens again.

“I don’t know that the governor will leave it in there,” Moon said. “He has been known to cut it out of that before.”

Moon’s $38,000 proposal is one of more than 400 earmarks, spending more than $2.1 billion, sprinkled throughout the $51.7 billion state budget passed by lawmakers this year. The total includes 284 new earmarked items, worth $1.7 billion, and 124 that are to receive continuing appropriations.

Last year, The Independent identified 275 earmarked items, totaling about $1.1 billion. The number began increasing during the 2021 session, as the size of the growing state budget surplus became apparent.

Parson must take action on the 16 appropriation bills before the new fiscal year begins on Monday. Whether the earmarked items are approved is not a question of money – the state has almost $6.4 billion in surplus funds and revenues through Tuesday have already exceeded estimates for the current fiscal year with three more days for collections.

But despite that surplus, Parson has targeted earmarked funds in his veto messages in each of the last three years. Last year, he cut $550 million from the budget by vetoing or reducing 201 budget items.

The previous year, the veto pen fell on $650 million in spending lines.

In an analysis of the budget, The Independent defined an earmark as an item not originally requested by Parson that is directed to a specific organization or region.

The largest example in this year’s budget is $727.5 million from general revenue and borrowed funds for improvements along Interstate 44 in southwest Missouri. The earmark was inserted by House Budget Committee Chairman Cody Smith, a Republican who represents Jasper County and is a candidate for state treasurer.

Other big road items include $150 million to widen U.S. Highway 67 through Butler County and $48 million for work on U.S. 65 between Buffalo and Warsaw.

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Some of the items, like Moon’s refund money, are repeats of items Parson vetoed last year. One is $3.4 million for improvements to LeCompte Road on the east side of Springfield.

“This is a local responsibility with minimal statewide impact,” Parson wrote about the project in last year’s veto message, a line that found a place in many vetoes.

There’s money to build hospitals in Kirksville and in Dunklin County, to fund eight local water and sewer projects, to convert a building at the University of Missouri-Columbia to the state Wine and Grape Institute and to pay for a parking lot at the stadium where the KC Current play soccer.

The Urban League of St. Louis is in line for a $1 million grant through the Department of Higher Education and the Boys and Girls Club of Poplar Bluff is in with a $2 million grant from federal COVID relief funds.

Obscure origins

Smith wanted to make sure everyone knew who was inserting the money for I-44 by holding a news conference to announce it. And Moon doesn’t hesitate to say that he sought the money for the tax refunds.

But finding the sponsors of the remaining 406 earmarks is more difficult. Unlike the earmark process in Congress, there are no legislative rules requiring members to make their appropriations requests public.

At their end-of-the-year news conferences, Republican and Democratic leaders in the Missouri House took opposite views on whether lawmakers should have to put their name on earmark requests.

House Speaker Dean Plocher, a candidate for secretary of state, said the legislature as a whole has responsibility for spending. There are no new earmarks that are targeted to Plocher’s St. Louis County district.

“We're not up here for personal credit,” Plocher said. “I don't think it's about bringing money back to your district.”

Every legislator who voted for the budget bills is responsible for the earmarks, Plocher said.

House Minority Leader Crystal Quade of Springfield, a candidate for governor, said lawmakers “absolutely” should have to identify the earmarks they seek. 

The Independent identified eight earmarks targeted to her district, totaling $45.8 million, for items ranging from $250,000 for the Springfield Sports Commission to $15 million for an alliance of health care providers to expand medical training.

“I'm proud when I'm able to bring money home to my district,” Quade said. “I wouldn't ask for something I was ashamed of that I didn't think Missourians would be happy with that money going towards.”

The transparency of requiring earmarks to have sponsors, Quade said, would help Missourians understand the legislature.

This year’s budget process, derailed by filibusters and finished with hours to spare under the constitutional deadline, was particularly obscure, with Smith and Senate Appropriations Committee Chairman Lincoln Hough cutting the final deal on every item behind closed doors.

“We should be responsible and be held accountable to the people of Missouri, and they should know how we're making those decisions,” Quade said.

For more than 250 of the new earmarks, The Independent was able to identify the House or Senate district where the appropriation is to be spent, either by decoding the legislative language describing the item or assigning it based on the home address of the organization to receive the funds.

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Moon said he often has trouble figuring out where a spending item is going.

“When a particular area, a county, is mentioned in a legislative bill, you talk about counties with a certain population, but not not less than or not more than a certain amount, and of course, that's a way around the special law prohibition,” he said.

In Moon’s view, many of the appropriations violate the constitution’s long-standing provision against grants of state money or credit to private entities. He filed constitutional objections, printed in the Senate Journal, specifically questioning 64 earmarked items totaling $131.9 million.

The largest item on Moon’s list is $17.5 million to support the Kansas City organization preparing for the 2026 World Cup matches at Arrowhead Stadium. In Moon’s letters, he encouraged Parson to veto the appropriations.

The constitutional limit only applies to state funds and includes an exception for using federal funds for designated public purposes. Many of the items on Moon’s list for the Department of Social Services use money the state receives for the Temporary Assistance to Needy Families program, or TANF.

Since the enactment of a federal welfare overhaul in 1996, Missouri has received about $200 million annually as a block grant intended to equal the amount used for cash benefits before the law. 

Because Missouri only paid out $16.5 million in direct benefits in fiscal 2023, the remainder is available for anti-poverty program grants. The earmarks in this year’s budget from TANF funds total $29.4 million.

Spending questions

Some earmarks began taking flak before the final budget votes. 

Democrats criticized $12.5 million to purchase land for a state park in McDonald County in the district of House Budget Committee Vice Chairman Dirk Deaton.

And Northeast Regional Medical Center in Kirksville attacked an earmarked $15 million for Hannibal Regional Healthcare System to construct a radiation oncology center in Kirksville. Northeast Regional’s attorney, Chuck Hatfield, said in a letter sent in April to Hough that the appropriation is improper because it allows Hannibal Regional to open a competing hospital where no need has been established.

Missouri requires medical providers to obtain a Certificate of Need for major capital investments. Hannibal Regional hasn’t even begun the process of obtaining the certificate, Hatfield noted.

“It would be inappropriate for the legislature to provide funding for a project that has not provided or demonstrated need in accordance with Missouri law,” Hatfield wrote.

If the Kirksville facility is not licensed as an inpatient hospital or long-term care facility, it would not need a certificate of need, Lisa Cox, spokeswoman for the Department of Health and Senior Services, said in an email.

It could need a certificate for capital purchases of $1 million or more, she said.

There are $57 million in earmarked appropriations for hospital construction or capital equipment in the budget plan on Parson’s desk. The largest is $25 million for an acute care inpatient behavioral health center at KC Children’s Mercy and the smallest is $425,000 for a computed tomography scanner at Golden Valley Memorial Hospital in Clinton.

The increased number of earmarks while the state enjoys a large surplus is likely to continue. Requiring legislative sponsors to be public for each item might cut back on the special spending, Moon said.

“It would make it a lot more transparent,” Moon said. “Most people, especially those who are opposed to earmarks, would like it. Those who want earmarks may not be so inclined to like it, though.”

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Missouri Independent is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Missouri Independent maintains editorial independence. Contact Editor Jason Hancock for questions: [email protected]. Follow Missouri Independent on Facebook and X.