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Negotiators fall short of balancing budget

May 14, 2002
By: Matt Williams
State Capital Bureau
Links: SB 1248

Sponsor:Sen. Jim Mathewson

Description: Revenue package

Current Status: Conference Committee Negotiations

JEFFERSON CITY - House and Senate negotiators agreed to raise more than $100 million in new revenues Tuesday, but still came short of a goal to balance next year's state budget.

Through a mix of new taxes, elimination of tax bonuses and accounting shifts, lawmakers agreed to draft a plan that would raise $106 million. However, with three days to go and opposition to various parts of the proposal, the threat of a special session loomed large over the Capitol.

The budget lawmakers passed last Friday spends $167 million more than the state is projected to take in, Gov. Bob Holden said. He pledged not to sign any of the spending bills into law until lawmakers pass revenue-generating bills to pay for them.

Although not explicitly stated by Holden, negotiators have said that a failure to come up with the money by Friday could result in a special session to draft a new budget.

The panel agreed to a handful of proposals that close the gap in the budget. Lawmakers agreed to eliminate interest payments on amended tax returns, levy a tax on pharmacies and "sweep" $30 million from hundreds of state accounts, many of which are formed to fund specific programs.

For the second day in a row, the conference committee of House and Senate negotiators rejected a proposal to raise casino boat taxes to cover the budget shortfall.

Negotiators rejected an amendment by Rep. Jim Foley, D-St. Louis County, to raise the percentage of gambling revenue that the state collects, raising $42 million. An earlier proposal to raise gambling taxes was defeated Monday.

An emotional Foley pleaded with his fellow lawmakers to consider raising gambling taxes, which he said would fulfill casinos' pledge to benefit education.

"We're in a crunch. Now it's time to go back and ask them for more," Foley said. "They should not be exempted at all."

Sen. David Klarich, R-St. Louis County, said any gambling tax increase would "inject political controversy" into the funding package, and could hamper Senate approval of the plan.

The panel also considered shifting $13 million from the state's Senior Rx prescription drug program. Lt. Gov. Joe Maxwell, who chairs the commission that runs the program, said that the program would cost less than originally expected, opening up the possibility of using that money elsewhere.

However, Holden would be required to veto part of that funding to tap the funds, something Maxwell cautioned was dangerous.

"If you're going to underfund this budget, give Gov. Holden the opportunity to choose the programs that make the most sense," he said.

The House has yet to debate a proposal that would generate up to $60 million by mortgaging a portion of the state's tobacco settlement payments.

Lawmakers have until 6 p.m. Friday to finish work on legislation. Holden can call lawmakers back for a special session to continue work at an estimated cost of $100,000 a week.