Holden, lawmakers closer to closing gap in state budget

Friday, February 14, 2003

JEFFERSON CITY, Mo. -- Republican legislative leaders and Democratic Gov. Bob Holden whittled away at Missouri's budget shortfall Thursday. But funding cuts still seemed likely for public schools.

Despite agreeing on new spending cuts and revenue increases, the bottom line was that state officials still were $82.3 million shy of covering a projected $350 million shortfall for the fiscal year ending June 30.

Unless lawmakers come up with more money next week, Holden said he would cut funding for public school districts and state colleges beginning in March.

School officials already are bracing for the cuts.

"Unfortunately, the Republican plan, as it now stands, endorses cuts to education as the answer to the remaining shortfall," Holden said Thursday.

But Republicans say Holden has other options, such as spending money now that typically would be held in reserve for the next fiscal year.

"I think the governor can clearly avoid cuts to education if he has the will, if he chooses his reserves over the school districts' reserves," said House Majority Floor Leader Jason Crowell, R-Cape Girardeau.

$350 million shortfall

Holden initially had proposed to cover the full $350 million shortfall by selling bonds backed by the state's future tobacco settlement revenues and the state treasury. The alternative, the governor said, would be $350 million in education cuts.

Last week, Republicans countered with a plan to use a maximum $100 million in bond revenues and make up the rest through a mixture of spending cuts and reductions in cash reserves.

Holden embraced some of their suggestions. But before Thursday, he said the state still needed $162 million to cover the remaining shortfall.

On Thursday, House Republicans passed legislation allowing up to $150 million of bond revenues to be spent this year. And Holden agreed to save another $30 million by delaying until next fiscal year the construction of a pharmacy building at the University of Missouri-Kansas City.

But there was no agreement on how to cover the remaining $82.3 million.

Some schools already were taking steps in anticipation of a state funding cut, said Chris Straub of the Missouri School Boards' Association. If the cuts occur, elementary and secondary education would lose $61.3 million and higher education $21 million.

Although many school districts could cover the cuts by dipping into their cash reserves, some would have to quit buying supplies, cancel student field trips and teacher conferences and delay building maintenance, Straub said.

The midyear cuts to public schools would be the first in about a decade, said Straub, a former Jefferson City school superintendent. State funding for colleges and universities was also cut last year.

Heated debate

Debate over the budget shortfall grew heated in the House, where Democrats criticized the Republican majority for not allowing the use of even more tobacco bond revenues.

Democratic Rep. Ted Hoskins said the expected school cuts would disproportionately hurt black children, because the St. Louis and Kansas City districts would sustain the deepest reductions.

"It's impossible to believe that we, as the legislators of this state, call ourselves Christians and then turn around and take money from our kids," said Hoskins, from the north St. Louis suburb of Berkeley.

Senators also debated a plan for the state's budget shortfall. But the proposal on tobacco bonding was quickly supplanted when Democratic Sen. Ed Quick of Liberty suggested an alternative of tapping into the state's so-called Rainy Day Fund.

Some Senate Republicans latched onto the idea, but the Senate quit Thursday without voting on the legislation.

Senate President Pro Tem Peter Kinder, who had expressed support for the proposal passed by the House, said the future of the tobacco bonding plan was uncertain in his chamber.

Last year, the Republican-led Senate overwhelmingly passed legislation to use the state's emergency savings account to cover the fiscal 2002 shortfall. But House Republicans, then in the minority, blocked the proposal.

House Speaker Catherine Hanaway said using the Rainy Day Fund this year "has been considered and, at least for now, ruled out" by House Republicans.

Holden urged senators to abandoned the Rainy Day proposal and instead permit at least $232.3 million to be used from tobacco bonding this year -- enough to cover the remaining shortfall.

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Tobacco settlement bills are HB401 (Pratt) and SB436 (Klindt).

On the Net:

Missouri Legislature: http://www.moga.state.mo.us

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