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Governor’s plan for $2.8 billion from American Rescue Plan Act gets first review from lawmakers

There was skepticism about new temporary state employees and the cost of developing the Rock Island railroad corridor into a new trail during the Senate Appropriation Committee’s first look at Gov. Mike Parson’s plan for spending $2.8 billion in federal coronavirus relief funds.

But for the most part, the 90 minutes presentation Thursday by Budget Director Dan Haug was a methodical item-by-item review and general questions about how the proposal is structured.

The state has $2.6 billion from the American Rescue Plan Act signed last March by President Joe Biden to cover revenue losses and invest in broadband and water infrastructure. There’s another $200 million for capital projects.

The committee members’ questions ranged from probing about how projects would be chosen to suggestions for projects to be funded. 

The proposal for $250 million in community development and revitalization funds is an example.

Maggie Kost, acting director of the department, explained after a question from committee Vice Chairman Lincoln Hough, R-Springfield, that the projects would be selected in a competitive grant program. Each would require a 50% local match, she said.

Another is the $25 million allocation for industrial site development. Haug noted that Missouri doesn’t have a “megasite” ready to compete for projects such as Intel’s $20 billion semiconductor factories in Ohio. 

Sen. Barbara Washington, D-Kansas City, wanted to know which sites had been identified as potential candidates for the funding and noted that there is an area in her community that would be ideal.

“We need all of it if we could have it and we’d be more than happy to take it off your hands,” Washington said.

In the plan, Parson is asking for money to make heating and cooling state buildings more efficient, wastewater generated in state parks cleaner and to pay for new or renovated buildings on every public higher education campus. 

The plan devotes 25% to infrastructure projects, envisioning broadband that will reach every remote location in Missouri, with faster speeds, and grants for water system improvements.

“We wanted these projects to have a lasting impact,” Haug said.

The state has until the end of 2024 to appropriate the money and until the end of 2026 to spend it. Parson wants to put the money in its own appropriation bill and obligate the full amount.

“We wanted to make sure the General Assembly, when they looked at this, understood the full cost of the project,” Haug said. “We only have $2.8 billion to spend, which is a lot of money to spend, but it is still a finite amount of money.”

There are large appropriations – $411 million for water system improvements – and small ones – $1 million to buy new software for the Department of Agriculture’s grain regulatory program to replace an obsolete system.

Other notable items include:

  • $139.5 million for capital investments in community health centers to improve mental health programs
  • $33.6 million to build a covered arena to seat 3,000 to 5,000 people at the State Fairgrounds in Sedalia
  • $104 million to build a new crime lab for the Missouri State Highway Patrol
  • $126.1 million to add online services and modernize state government computer systems

Where applicable, Haug said, the plan requires matching money from local funds or, in the case of higher education construction, the colleges and universities.

Sen. Denny Hoskins, R-Warrensburg, asked about plans to hire 13 new employees in the Department of Economic Development to oversee the spending of $250 million in broadband infrastructure funds. The budget plan promises that the jobs will not be permanent.

“I can guarantee that none of these positions will be cut in four or five years,” Hoskins said. “We are just going to keep growing.”

Hoskins, who wants to cut unfilled jobs across state government, enlarged the inquiry beyond the particular line of questioning to the entire state budget. He asked Haug why Missouri has almost twice as many state employees per capita as Illinois.

Haug responded that Illinois has many employees at the county level that do the functions state workers do in Missouri. He also defended the state’s financial health compared to Illinois. 

Missouri has a AAA bond rating, he said, and Illinois’ bonds are rated as junk, or below investor grade.

“I don’t know if we want to operate our state like they do,” he said. 

Hough raised questions about the plan to spend $69 million to develop 78 miles of the former Rock Island rail corridor from Eugene to Beaufort. Eventually the Department of Natural Resources intends to develop the entire 144-mile line like the Katy Trail State Park.

Hough questioned the cost-per-mile and the protections for landowners along the way to prevent people trespassing.

The section to be improved includes three tunnels and two bridges – one 1,774 feet long over the Gasconade River – that must be prepared for bicycle and pedestrian traffic. It is, department Director Dru Buntin said, the “most challenging” section.

Trail users will be limited to the corridor, he said.

“We are absolutely committed to being good neighbors,” Buntin said.

This article by Rudi Keller is published by permission of The Missouri Independent.

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