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Holden halted in the house

February 22, 2001
By: Ben Paynter
State Capital Bureau

JEFFERSON CITY - The Missouri House rejected Gov. Bob Holden's plea to allow him to use tobacco settlement funds to make up for budget shortfalls.

The House rejection, a 69-87 roll call vote, was Holden's first legislative defeat since he became governor last month. The vote came just a few hours after Holden held a hastily called news conference to urge legislative support for his budget plan.

Administration officials project a $308 million deficit by the end of the fiscal year, just four months away. Since Missouri's constitution does not allow deficits, Holden warned he would be forced to make deep budget cuts without extra money.

Holden has proposed $127 million of tobacco settlement funds be funneled into the budget to ease the shortfall. Both he and House Budget Committee Chairman Tim Green, warned that higher education construction projects would be cut without the additional funds.

"Education has been severely cut to the bone," Green said. "They should have the right to use that money for improvements."

Rep. Chuck Graham, D-Columbia, said the state of the current bill would threaten a $30 million life sciences center purposed in Columbia.

"This is critical news for the state to address," Graham said. "It means grave jeopardy for projects very important to us."

But Republicans voted en mass against Holden's plan, arguing that tobacco funds should be held for special programs like health care and anti-smoking.

Rep. Charles Shields, R-St. Joseph, said he was against spending the tobacco money because it would supersede public expectations for how the settlement was to be used.

Others noted that the state does not yet have any of the tobacco settlement money. The final steps to close down the state's lawsuit against the tobacco industry have not been taken.

"It's wrong to turn to a settlement check we have not received," said Rep. Pat Naeger, R-Perryville.

The governor's budget office blames the budget shortfall on a slowdown in tax collections and higher than expected claims in a program to provide tax credits for prescription drug costs to the elderly.

Holden said state has not been in economic straits this severe since 1993.

He said the cash shortage has forced him to make cuts in current budgets and recommend no pay raises for state workers next fiscal year.

Fifteen of Holden's fellow Democrats voted against his request, including House Speaker Jim Kreider, D-Nixa. Kreider said that while he supported the governor's effort, the governor had failed to win over enough Republicans to make it a bipartisan effort.

"This is a new era in which partisanship can not dictate," Kreider said. "You need bipartisan support to get anywhere."

Holden said the use of tobacco settlement money is a good solution for the budget. Other proposed solutions involve withholding more money from state agencies, or using funds designated for unexpected crises.

After the vote, Holden issued a statement that he was "deeply disturbed that a majority of our House members would place the state in a position which we fail to make much-needed investments in our colleges and universities, jeopardize future budgets and leave our current budget with no ability to deal with emergency financial situations."

After defeating the tobacco fund amendment, House leadership delayed a vote on the overall supplement funding bill unitl Monday. It contains a number of appropriations to meet unexpected costs in the remaining months of this fiscal year that will end June 30.