If the Missouri budget becomes law with language banning state spending on diversity initiatives, Gov. Mike Parson’s administration says it would disrupt routine government operations as small as purchasing gas and as large as the Medicaid managed care program.
In the days after the Missouri House approved spending bills with anti-diversity, equity and inclusion provisions sponsored by state Rep. Doug Richey, R-Excelsior Springs, the state Office of Budget and Planning received reports on potential impacts from 14 state departments.
Some saw little impact. Others saw major disruptions. And the Office of Administration reported that the language would not fly in court.
The provision, which Richey included on all but one of the 13 budget bills funding state government, would create a conflict with laws encouraging businesses owned by women and minorities to participate in state contracting, the Office of Administration said in its impact statement.
“This amendment conflicts with these substantive laws,” the statement read. “It is also unconstitutional in that it attempts to place substantive law within an appropriation bill.”
The Independent obtained the departmental evaluations through a Sunshine Law request to the Office of Budget and Planning. Departments regularly update the budget agency on how they view changes in the budget and 14 of the 17 state departments commented on the amendment proposed by Richey.
As those evaluations have circulated in the Capitol, Richey has been working to salvage his proposal by narrowing its scope and arguing that agencies have wildly overstated the impact.
“I never had a target on state contract holders or vendors, or service providers reimbursed through Medicaid,” Richey said in an interview with The Independent. “That has never been a focus of mine. You have individuals in various departments looking at it and trying to play out every possible scenario.”
Vendors might not bid on state contracts
The prospects for Richey’s revised amendment will become clear this week when the Senate Appropriations Committee meets to consider changes to the House-passed spending plan.
The Office of Administration evaluation was the longest and most detailed. The agency provides centralized administrative services for many departments, including purchasing, information technology and building maintenance.
Contracts for future purchases of goods and services would have to include language certifying that vendors do not violate the amendment in their operations.
“Such requirements may prohibit some vendors from bidding on state contracts which would result in less competition if vendors are unable or unwilling to provide such certification,” the evaluation stated. “Additionally, the time needed to verify each vendor’s compliance would likely result in increased procurement turnaround time.”
A new provision would have to be added to each of the 2,300 current contracts to ensure vendors agreed to abide by the new law, the statement read.
“If the contractor is unwilling or unable to agree to the amendment to the existing contract, the state would potentially have to terminate contracts that are in process such as large system implementations contracts like the state’s new financial management system contract, which could be detrimental to the state,” the statement read.
And when they are traveling on state time, the Office of Administration reported, state employees would have to follow the rules governing formal purchase contracts.
“As a practical matter, it would be very difficult if not impossible for state team members to know whether a gas station, a hotel, convenience store or restaurant they spend money at for work related expenditures are unauthorized,” the report stated.
As passed by the House with almost unanimous Republican support and solid Democratic opposition, the restrictive language barred any spending on “staffing, vendors, consultants, or programs associated with ‘Diversity, Equity, Inclusion,’ or ‘Diversity, Inclusion, Belonging.’”
The prohibited initiatives would be any that promote “1) the preferential treatment of any individual or group of individuals based upon race, color, religion, sex, gender, sexuality, ethnicity, national origin, or ancestry; 2) the concept that disparities are necessarily tied to oppression; 3) collective guilt ideologies; 4) intersectional or divisive identity activism; or, 5) the limiting of freedom of conscience, thought, or speech.”
It includes a provision that agencies are required to follow federal and state anti-discrimination laws.
'Significant impacts'
Richey’s amendment ran into immediate opposition in the Senate, where Senate Appropriations Committee Chairman Lincoln Hough, R-Springfield, said he would start by “taking that completely out.”
Hough said the language is “problematic for a number of reasons.”
The budget action reports highlight some of those reasons.
In the Department of Social Services, the report was just two words: “Significant impacts.” Acting Director Robert Knodell said those impacts include possible problems for its work with faith-based foster care agencies and contracts for Medicaid providers and managed care organizations.
The Department of Elementary and Secondary Education said the language, as passed, could disrupt distributions of state funds under the foundation formula, the major aid program for local public schools.
In an email, Deputy Commissioner Kari Monsees noted that 75% of state aid through the foundation formula must be deposited into a district’s teacher fund.
“DESE does not have a mechanism to determine if such funds are spent on certified staff dedicated to DEI efforts, or any other DEI programs or activities conducted with the use of operating funds,” Monsees wrote.
The Department of Higher Education and Workforce Development, in its statement, reported that it would have to end partnerships with private organizations such as the Missouri Chamber of Commerce, which hosts diversity, equity and inclusion programs in its training events and likely end diversity, equity and inclusion programs on college and university campuses.
“While they have multiple funding sources outside of state funding, it would be nearly impossible to delineate between what funds are used in the context of partnering with businesses, organizations, or other entities that are ‘associated’ with DEI,” the statement said.
Other agencies were much more specific in the anticipated impacts.
The Department of Mental Health could lose accreditation of its inpatient facilities because “cultural competency” is a part of the standards it must meet, Molly Boeckmann, director of Administrative Services wrote.
Those facilities generate $148 million in federal funds that would be put in danger by a loss of accreditation, Boeckman wrote.
The language could eliminate clinical training programs offered by the department because it could not include cultural competency training, Boeckman wrote. And it could make it difficult to find providers to care for department clients, she wrote.
“This would impact DMH’s contracting process since certification would have to occur prior to the award of a contract and subsequently may negatively impact DMH’s ability to attract new providers,” Boeckmann wrote.
The Department of Economic Development identified three budget items that appear to violate the provisions. The department could not continue a $25 million federally funded business promotion program to help socially and economically disadvantaged individuals become entrepreneurs, as well as a staff member dedicated to diversity, equity and inclusion efforts in its Regional Engagement Division and the Women’s Council initiative on strategy and performance.
The department “continues to review other programs that may be impacted by this language,” Stacy Hirst of the administrative division wrote.
Six departments — Agriculture, Revenue, Natural Resources, Corrections, Commerce and Labor — reported that the impact was insignificant or unknown.
The departments of Transportation and Public Safety and the newly formed National Guard Department did not provide a response.
'Billions of dollars in cuts'
Richey has been actively lobbying in the Senate to salvage his provision. His latest version would be limited to a ban on any spending for “intradepartmental” programs on diversity, equity and inclusion and add additional language requiring compliance with the Americans with Disabilities Act in addition to anti-discrimination laws.
He said he spoke with Hough but received no commitment. He also met with Senate President Pro Tem Caleb Rowden, who tweeted soon after the House passed the budget that the language was “overly broad and would result in billions of dollars in cuts to hospitals, health care facilities, colleges and universities, and the Missouri House of Representatives itself.”
Rowden, however, added he wanted to work to find language to “incentivize institutions within this state to encourage environments of merit, fairness and equality…”
The replacement language is designed to limit the impact of the amendment, Richey said.
“My focus has always been solely focused on internal or intradepartmental DEI initiatives that affect state employees,” he said.
While he’s sympathetic to the push to limit diversity, equity and inclusion programs, Rowden noted at his weekly news conference Thursday that time is growing short and the budget has big initiatives like widening Interstate 70 that could be jeopardized by delay.
“I don’t know exactly how we get there,” Rowden said. “But we’re not going to let small things or things that maybe are distractions get in the way of the big picture. So, if we can find something that works, great.”
This story was originally published on the Missouri Independent.
