JEFFERSON CITY, Mo. -- Missouri budget negotiators pressed ahead Tuesday with retaliatory cuts for agencies caught up in a controversy involving driver's licenses and concealed gun permits but rewarded public education institutions with millions of additional state dollars.

The give-and-take approach highlights a new political reality at the Missouri Capitol. Improved state revenue have created the potential for funding hikes, but the Republican supermajority in the Legislature has been increasingly forceful in objecting to the policies of Democratic Gov. Jay Nixon's administration.

The budget plan a panel of House and Senate members agreed to will fund Missouri government for the 2014 fiscal year, which starts July 1. The state constitution requires both chambers to give final approval to the budget by Friday.

The budget process this year has been overshadowed by Republican anger about a new Department of Revenue policy requiring clerks to make electronic copies of personal documents such as birth certificates or concealed gun permits when people apply for Missouri driver's licenses or identification cards.

On Tuesday, budget negotiators agreed to cut the budget for the Revenue Department's motor vehicle division by one-third because of its new licensing procedures.

Nixon has since halted the copying of concealed gun permits but has continued accumulating copies of other documents in a state database that administrators say helps fight fraud.

Republican lawmakers contend the document copying is an invasion of privacy. They also have raised concerns that the Missouri State Highway Patrol provided a list of concealed gun permit holders to a fraud investigator in the U.S. Social Security Administration -- even though the investigator never ultimately used the list.

Lawmakers said the money amounted to eight months of full funding, and the agency could get the rest if it has stopped copying and retaining documents when lawmakers reconvene next January.

The cut is intended "to put them on notice that they need to change what they were doing," said House Budget Committee Chairman Rick Stream, R-Kirkwood.

Nixon's budget director, Linda Luebbering, said the administration would decide later how to respond to the budget cut, including whether to treat it as an eight-month appropriation as intended by lawmakers.

Budget negotiators also agreed to several other retaliatory cuts. They cut funding by one-third for a contract with MorphoTrust USA, which prints and mails Missouri's driver's licenses, with the understanding that the rest of the money could be provided later.

They also cut amounts equivalent to the salaries of the general counsel in the Department of Revenue, the deputy director of the Department of Public Safety and Administrative Hearing Commissioner Alana Barragan-Scott, who was the Revenue Department director when the document-scanning procedures were implemented late last year.

But lawmakers cannot force particular employees out of jobs, because state agencies have flexibility to manage their own personnel.

The message-sending cuts stood out because legislative budget negotiators frequently chose Tuesday to provide more money to agencies.

They agreed on a $66 million increase to the state's $3 billion of basic aid to public elementary and secondary schools -- the same amount recommended by Nixon.

House and Senate negotiators also agreed to provide a $25 million increase to public colleges and universities to be distributed according to whether they have met performance criteria such as student retention and graduation rates. That's less than the $34 million that Nixon had recommended but more than the House had approved earlier this year.

The proposed budget includes $10 million for the University of Missouri medical school to expand a residency program at the Cox Health system in Springfield, and $1.3 million to help establish an occupational therapy program at Missouri State University in Springfield.

Senate Appropriations Committee Chairman Kurt Schaefer, R-Columbia, said the budget plan was balanced and would spend several hundred thousand less in general revenue than Nixon had proposed.

But Luebbering cited several concerns that could cause costs to rise. She noted that lawmakers had axed out millions of dollars that had been sought to fund an expected increase in children covered by Medicaid as additional provisions of President Barack Obama's health care law kick in next year. Schaefer said he doubted the increase would occur but, if it does, lawmakers could add the money halfway through the fiscal year.

The legislative budget also assumes lawmakers will generate savings by repealing a tax credit for low-income seniors and disabled people who live in rental housing. It also would generate revenue by offering an amnesty period to entice overdue taxpayers to pay up. Both measures face uncertain fates.

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