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Early Approval For Rainy Day Use

May 01, 2002
By: Brian Connolly
State Capital Bureau

JEFFERSON CITY - Time is short, money is tight and state lawmakers now have to deal with two budgets instead of one. Those factors came together Wednesday to force movement on a revamping of the school foundation formula and use of the so-called Rainy Day Fund.

The Republican-controlled Senate Appropriations Committee approved tapping $120 million from Missouri's reserve fund as part of a proposal for bridging a projected $230 million gap in the final two months of the current year's budget.

The plan also calls for $50 million to come from withholdings of Tobacco Settlement funds, including $21.1 million that was earmarked for life sciences. An additional $29.3 million would be withheld from state agencies and $30 million for maintenance of state facilities would be cut.

Earlier this year, Gov. Bob Holden proposed using the Rainy Day Fund to pay for programs in the next fiscal year. That proposal was opposed by many Republican lawmakers and failed to receive the necessary two-thirds majority during budget debate in the House. Committee member Sen. Larry Rohrbach, R-California, said using the fund for unexpected shortfalls in the current budget is different.

"That is in fact what it's designed to do," Rohrbach said.

Using the Rainy Day Fund for Fiscal Year 2002 further complicates an already difficult situation for Fiscal Year 2003. State Budget Director Brian Long said using the fund this year likely means that it can't be used next year as Holden had proposed. About $40 million, plus interest, of the money taken from the fund to cover the current budget would also have to be paid back in the Fiscal Year 2003 budget.

House Minority Floor Leader Catherine Hanaway, R-St. Louis County, said Republicans in the House are still looking at options other than borrowing from the fund.

"We're open to taking a look," Hanaway said. "Right now we're not convinced that we should."

Hanaway rejected the idea that House Republicans would be forced to support use of the fund now that it has received the backing of Holden, Democratic lawmakers and some Senate Republicans.

"I don't think we're backed into a political corner," she said. "We're not going to be backed into any corner."

Hanaway also criticized House Speaker Jim Kreider, D-Nixa, for refusing to appoint Representatives to a House-Senate conference committee to reconcile differences between their versions of the budget.

Going into Wednesday Kreider had appointed conferees for two budget bills, but refused further appointments until lawmakers agree on a restructuring of the school foundation formula. Kreider backs a bill from Rep. Chuck Graham, D-Columbia, that would require $175 million from the state for full funding.

"The Speaker is holding the budget hostage so that he can advance one of his legislative priorities," Hanaway said.

By mid-afternoon a conference committee agreed to Graham's bill, which is still subject to final approval. Later, Kreider proceeded to appoint conferees for two additional budget bills.

Graham said he is "very optimistic" the formula will receive full funding at the level his bill would establish.

"Once you know what the number is that you're shooting at, it makes it more likely tht you'll get there," Graham said.

Work on the budget for Fiscal Year 2003 is constitutionally required to be completed by May 10.