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JEFFERSON CITY — Gov. Mike Parson on Wednesday unveiled a record $47 billion budget blueprint for the next fiscal year, touting what he said was Missouri’s booming economy and a “historic budget surplus.”

“Missouri’s economy is strong,” Parson said during his annual State of the State address. “With a historic budget surplus and federal dollars coming into our state, we want to build on our past momentum to capture even greater opportunities for the future of Missourians.”

His budget plan includes $24 billion in federal funds, a $9 billion increase over the current fiscal year. Of that, about $3 billion in American Rescue Plan Act funds are included; the federal spending plan was approved with only Democratic support in Congress last March.

Parson said Missouri would be using the federal support on long-term investments.

The Republican governor’s staff outlined American Rescue Plan spending — including $400 million for broadband, $411 million for water project grants and lead service line identification and $126 million for modernizing online government services — during a briefing before Parson’s speech.

Budget documents outline $469 million in American Rescue Plan funding on capital improvements at Missouri public colleges and universities.

Money for education

The budget proposal for the fiscal year beginning July 1 includes $10.5 billion for elementary and secondary education, a $3 billion increase over the current fiscal year. Parson said he once again was fully funding the state’s education formula. And his plan increases core funding for higher education by nearly $52 million, according to budget materials.

“The future of Missouri — and Missouri families — relies upon children being healthy, safe and ready to learn,” Parson said. “We must continue to invest in our children and their education.”

He said Missouri ranked last in the country for starting teacher pay and that half of teachers leave within five years.

“We are proposing to raise teacher pay in every corner of this state,” Parson said. “By partnering with local school districts, we can increase the baseline salary of new teachers to $38,000.”

Parson also proposed funneling a $500 million one-time payment to the state pension system on top of annual contributions, shoring up the system for the future, Budget Director Dan Haug said.

Haug said the governor is not planning to spend every dollar the state has in its accounts in the coming fiscal year, which begins July 1.

“We’re going to try and be responsible and keep some of this money for the future,” Haug told members of the Senate Appropriations Committee Wednesday.

Repeats call for pay raises

Parson, during his speech, also repeated his call for lawmakers to approve a mid-year budget adjustment by Feb. 1 that includes 5.5% raises and a plan to bump the minimum wage for state employees to $15 an hour.

“This is long overdue,” Parson said to bipartisan applause.

The state is struggling to hire and retain workers, with a turnover rate of about 26%.

At the Fulton State Hospital, which treats mentally ill Missourians, officials want to open a new ward, but are unable to because of a lack of staff, Haug said.

That has left 170 people needing treatment waiting in jail cells, rather than receiving treatment.

At the Missouri Veterans Commission, a lack of staffing has forced the agency to cap the number of veterans it cares for at seven nursing homes.

The governor’s supplemental budget request also includes a $100 million fund to pay for unknown future costs of the pandemic, raising questions from lawmakers that it could be treated as a “slush fund.”

He is also proposing to place $280 million in a rainy day fund.

“This is the conservative thing to do,” Parson said. “This is the right thing to do.”

Parson also said the income tax rate would fall to 5.3% this year, “thanks to our record economic performance.”

Lauds his response to COVID

Parson said the events of the last year, including bicentennial celebrations, wouldn’t have been possible were it not for state action to combat COVID-19.

“While there will always be endless critics to tell us how we could have done it better, the facts are we were the ones in the arena,” Parson said. “We made the tough decisions and never cowered down to the challenges we faced.”

Parson also touted his “balanced approach” to the pandemic.

“When it comes to COVID-19 mandates, I firmly believe that the people should have a say through their local elected representatives and not be dictated by needless executive action or any one person,” Parson said.

He also accused the media of “purposely” overshadowing the state’s accomplishments, “because positive news don’t sell headlines,” reflecting Parson’s increasing hostility toward the news media.

“Our unemployment rate sits at 3.5%; that’s below where we were before the pandemic and below the national average,” Parson said. “Missouri is open for business and business is good.”

Parson touted his Fast Track scholarship program, saying more than half of recipients are enrolled in health care programs — “a blessing considering the last 22 months.”

He also said the state must “never allow anti-law enforcement measures to take hold. In Missouri, we defend law enforcement, not defund them.”

Democratic response

Democrats expressed excitement about this year’s budget and criticism of Parson after his speech.

“He talked about law enforcement in a confusing way,” said House Minority Leader Crystal Quade, D-Springfield. “It was nice to hear the conversation that he had, but we all know that he also signed SAPA into law, the Second Amendment Preservation Act, which actually does defund the police.”

She was referring to a provision in the 2021 law that subjects local police to $50,000 fines if they are in violation of the law.

“The governor is in a strong position to do many great things. But too often in the past, he has let Missouri down,” Quade said. “We’re excited to look at the budget he’s put forward. And I know that there are many things that the Democrats have been fighting for and asking for for a very, very long time that we’re hoping we’ll be able to get funded this year.”

Kurt Erickson and Grace Zokovitch of the Post-Dispatch contributed to this report.