JEFFERSON CITY - Missouri's $24 billion budget passes the Senate Appropriations Committee Thursday with level funding for public education.

Senate Appropriations Chairman Kurt Schaefer, R-Columbia, said this was probably the most difficult budget year ever. The budget in the Senate is $86 million below what the House had passed last month, but freezes funding for K-12 and higher education.

Colleges and universities were facing a 15 percent cut under a proposal from Gov. Jay Nixon, but were spared when the House passed their budget last month. The House was able to fund public universities at the same level as last year through a $40 million boost from a national settlement against mortgage companies and cuts to a $28 million health care program for the blind.

Schaefer's committee also endorsed Nixon's plan to keep funding stable for K-12 education, including a $5 million increase recommended by Nixon. Despite the small increase, the formula for funding local school districts is still below the recommended amount in law. The lack of adequate funding means the rural schools without a large local tax base will continue to lose funds disproportionately to suburban schools with higher local revenue.

The Senate Appropriations Committee kept funding for higher education equal to last year, but they did not go along with the House's cut to the blind. Schaefer proposed a new plan to fund the 2,800 people who do not qualify for Medicaid benefits.

The Senate plan would have those people pay an $111 premium and $600 deductible for insurance coverage. Those figures come from the amount paid by active state employees. The proposal would also require people on the program to apply for Medicaid benefits before receiving the supplemental coverage.

People who are blind will still continue to receive $707 a month from the Blind Pension Fund, which is paid for by the only statewide property tax.

One committee member said he was concerned about the Senate's plan because they are trying to set up a state program through the budget process.

"We are way out on the edge of legislating through a budget bill. I have severe reservations," said Sen. Rob Schaaf, R-St. Joseph.

Tax credits has also been a discussion point for the state's budget. Although the General Assembly has failed to cap some of the existing programs, some senators may be looking at the budget to address the issue.

Sen. Will Kraus, R-Jackson County, said the state could have a lot more money to spend if tax credit programs were reined in and capped. Schaefer said there could be some discussion on the Senate floor, but it would be "outside the scope" of the budget.

Schaefer said it was unrealistic to assume "everybody's problems are going to be solved by putting in the budget."

The Senate budget also reflects the loss of $70 million in expected revenue from a tax amnesty program, which has failed to pass the General Assembly a number of times. The program would allow a grace period for people who are late on taxes to pay them without penalty. The House and Gov. Jay Nixon anticipated this revenue in their budget proposals.

"It is apparent we are not going to pass tax amnesty," Schaefer said.

To make up part of the fund difference from the loss of tax amnesty the Senate cut:

• $12 million from a foster care program.
• $1 million from prison food services.
• $3.1 million from a positive fund balance in state employee benefits.   

The committee also modified Nixon's proposed pay raise for state employees. The panel approved a two percent pay raise effective July 1 (the start of the state's fiscal year), but only for employees making less than $45,000 a year. Nixon's plan gave the raise to all state workers, but would have taken affect January 1, six months after the fiscal year begins.

Missouri is facing a $500 million budget hole from last year due to the expiration of one-time federal stimulus dollars and a cut in the federal government's payments to the Medicaid program.

The budget now goes to the Senate floor. It must be passed by May 11.