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General revenue appropriations by legislature would be limited with proposed constitutional amendment

March 10, 2004
By: Sara Bondioli
State Capital Bureau
Links: HJR 49

JEFFERSON CITY - Another limit on Missouri state government spending would be put in place with a measure under consideration in the House Budget Committee.

The House resolution would amend the state constitution to restrict the amount of general revenue money the legislature could appropriate each budget year.

But a group of about 20 opponents at the Capitol Wednesday said a restriction on appropriations moves the state in the wrong direction. Amy Blouin, executive director of the Missouri Budget Project, said the measure is unnecesary and will likely result in more cuts to education and health care in the state.

"We need no lid. We need no additional fiscal constraints in this state other than the lid that was already imposed by the original Hancock Amendment," she said.

The Hancock Amendment, passed in 1980, requires that Missourians approve large revenue increases passed by the legislature. Like the Hancock Amendment, this measure would require approval by Missouri voters in November before it would go into effect.

The measure's sponsor, Rep. Brad Lager, R-Maryville, said it would force the legislature to prioritize within a limited budget in the same way individuals do.

"They have to define, just like you and I do with our household budgets, here's how much I have. And now I have to decide what's most important -- what am I going to pay for," he said.

Lager said government has been allowed to grow uncontrollably in good economic times. The result is greater difficulty when state revenues drop, he said.

The measure adjusts the general revenue appropriations limit each year based on inflation and population growth. Blouin said some portions of the budget, such as health care, grow at rates faster than the factors accounted for in the resolution.

In response to concerns such as that, Lager said the resolution would weight the 20 percent of the budget that usually goes toward health care by adjusting it according to the health care Consumer Price Index. The other 80 percent would be adjusted according to the regular Consumer Price Index. The measure allows for an additional 1 percent growth on top of that.

But Blouin said that doesn't address the entire problem. The increase the weighted method allows for is minimal, she said. As the elderly population size grows, so will the percentage of the budget needed to provide health care for them.

In addition, the resolution would establish a cash reserve fund to act as a state savings account and keep cash flow solid through months of lower revenue.

It would also establish a budget reserve fund. In bad economic years, money from the fund would automatically be transferred for use by the state. Additional money from the fund could be used with approval by 2/3 of the legislature.

Unlike the current rainy day fund that the legislature must begin paying back the year after money is used, the budget reserve fund would allow the legislature to hold off on paying back the fund until state revenues rise again.

Rep. Vicky Riback-Wilson, D-Columbia, said HJR 49, the bill number by which the measure is known, would take decision-making power away from the legislature -- and, ultimately, the people.

"HJR 49 eliminates the ability for governmental decisions to be by the people and for the people, by tying the hands of those elected to represent the people," she said.