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Holden calls legislature into session

Thursday, September 4, 2003

JEFFERSON CITY, Mo. -- Republican lawmakers accused Gov. Bob Holden of wasting their time and taxpayers' money as the Democratic governor announced that he would call lawmakers into a special session to again consider raising more money for education.

Holden on Wednesday urged lawmakers to take "baby steps" for schools by eliminating four "corporate loopholes" that would raise $44 million this year and about $80 million next fiscal year.

He set a special session to begin Monday -- two days before lawmakers are to convene anyway to consider overriding Holden's vetoes of bills on abortion, concealed guns and a couple of dozen other issues.

But nothing requires the Republican-led legislature to actually consider Holden's proposals.

In fact, the chairman of the House Tax Policy Committee said he would refuse to give Holden's revenue measures a hearing.

"The governor has again, as usual, wasted the taxpayers' time and money by having us come over here for a special session, because he's not going to get the revenue enhancements," said committee chairman Rep. Shannon Cooper, R-Clinton.

Senate Majority Floor Leader Michael Gibbons echoed Cooper's sentiments about wasted time and money while stopping short of vowing there would be no debate on the bills.

"I just have a hard time understanding why this makes sense," said Gibbons, R-Kirkwood. "It strikes me of being of very little benefit."

Holden's special session call marks his third attempt this year to get the legislature to go along with his revenue-raising agenda. His latest proposal is significantly scaled back from the roughly $700 million in new taxes and revenue he had proposed in January.

"Admittedly, this is a modest step," Holden said at a Capitol news conference. "But getting this legislature to take even baby steps in favor of our schools is a major undertaking and breakthrough."

At the start of the fiscal year in July, Holden withheld almost $200 million of the $4.55 billion that lawmakers appropriated for elementary and secondary education. He claimed lawmakers had failed to provide enough money to back up their spending.

The cuts came after Republican lawmakers ignored most of the Democratic governor's revenue proposals -- both during their regular session that ended in May and during a special session in June. Republicans contend voters expressed their opposition to tax increases by rejecting three ballot proposals last year.

Holden's latest proposal does not raise enough money to require a statewide vote.

Two out of four

Two of the four revenue proposals offered by Holden for the upcoming special session were approved in different forms by lawmakers earlier this year. But Holden contends lawmakers did not go far enough in scaling back the tax breaks available to big boat purchasers and in restricting the ability of businesses to keep overcollected state sales taxes.

Republicans have been hesitant to end the other two "loopholes" cited by Holden -- a business incentive for prompt payment of employee withholding taxes and an income tax exception that lets some corporations avoid Missouri taxes by transferring money to other states.

Holden said Missouri is the only state that allows businesses to keep a percentage of the state income taxes they withhold from employees paychecks as a reward for collecting the taxes quickly and correctly.

About half the states already have passed laws ending the accounting technique under which corporations establish a patent company in a state that does not tax them, such as Delaware, then transfer revenue there as royalty charges.

Cooper said a legislative committee would study whether the eliminate or modify the latter exemption sometime in the future, but not during the special session. He said the tax break for paying employee withholding taxes promptly is a good incentive for businesses.

Holden also left open the possibility of expanding the special session to include other issues, such as a proposal to rein in rising medical malpractice insurance rates by limiting liability lawsuits. The governor vetoed such legislation earlier this year because he opposed provisions that would have limited lawsuits in all personal injury cases, not just medical malpractice.

Representatives of doctors, hospitals, lawyers and insurers met with the governor's staff Wednesday. But prospects for a compromise looked slim, and Holden has said he will only add the issue to the special session if all parties agree on a proposed bill.


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