Dire predictions for state's finances fail to materialize

Sunday, May 9, 2004

JEFFERSON CITY, Mo. -- Although Missouri government has struggled financially in recent years as sluggish tax revenue growth failed to keep up with spending, most state budget experts just months ago predicted the situation would devolve into a disaster for the upcoming fiscal year.

But thanks to a rebounding economy, the Republican-led legislature managed to produce an $18.87 billion operating budget for the fiscal year beginning July 1 that would increase state spending by more than $1 billion.

And they did it without approving any portion of the $520 million package of tax increases and other revenue-boosting measures that Democratic Gov. Bob Holden in January said were essential to maintaining needed state services.

Throughout the legislative session Senate President Pro Tem Peter Kinder, R-Cape Girardeau, criticized Holden for proposing a budget built on the "phantom revenue" of unapproved taxes.

Although the legislature's budget would increase state spending by 5.8 percent and exceeds Holden's recommendation by nearly $45 million, Kinder was unwilling Friday to cut the governor any slack for offering a budget plan that at the time he believed to be unbalanced based on anticipated revenue, even though the money turned out to be there.

"That would involve several convolutions that I'm not willing to go through," Kinder said.

While the final budget surpasses all expectations, some Democrats still grumbled about it, saying the state hasn't regained the ground lost due to the spending cuts of recent years.

"Maybe it wasn't as bad as we thought it was going to be, but we have a long way to go to get back to the kind of services Missourians deserve," said state Sen. Joan Bray, D-St. Louis.

House Speaker Catherine Hanaway, R-Warson Woods, acknowledged there is a need to improve funding in certain areas of the budget, such as education.

"Even though times are better, we are climbing out of a hole that has gotten deeper and deeper each of the last three successive years," Hanaway said.

Tough talk, little change

During a showdown with the Senate over Medicaid spending, state Rep. Carl Bearden, the House budget chairman, said he was willing to miss Friday's constitutional deadline for completing the budget if the upper chamber didn't go along with cuts to the program proposed by the House.

In the end, Bearden blinked and agreed to a face-saving compromise under which the eligibility requirement would be raised so only 324 Medicaid recipients will lose coverage instead of as many as 40,000 Missourians who would have been kicked out of the program under the House plan.

Billboard ban

Billboards promoting sexually oriented businesses would be prohibited along Missouri highways under legislation awaiting the governor's signature.

The measure would ban billboards for strip clubs, adult bookstores and similar businesses within a mile of a highway. Such businesses within the prohibited zone could only display up to two signs on their property listing the name of the establishment, address, telephone number and operating hours plus notice that the premises are off limits to minors.

Existing billboards that don't conform to the bill's restrictions would be grandfathered for three years, after which they would have to be removed. Violation of the measure would be a misdemeanor.


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