Budget dealings for state moving forward

JEFFERSON CITY, Mo. -- The evolving plan for balancing the current state budget without deep cuts to education is being called a compromise. But from listening to those involved in the fight to keep the state in the black for the next four-plus months, you wouldn't necessarily know it.

Noting that Gov. Bob Holden eventually accepted some Republican proposals that he had initially rejected, Senate President Pro Tem Peter Kinder, R-Cape Girardeau, said the governor had "caved" on the issue. For his part, Holden said Republicans have steadily moved toward his position.

While a long way from achieving bipartisan harmony, the Democratic governor and Republican lawmakers are making steady progress on the first major issue of contention since the GOP took control of the General Assembly last month.

A bill rushed through the House of Representatives last week would allow the state raise $150 million for the fiscal year ending June 30 by selling revenue bonds to be paid back over 37 years using proceeds from the state's financial settlement with cigarette producers.

The measure passed 123-36 with all the no votes save one coming from Democrats. Southeast Missouri's representatives voted 12-2 in favor with only Democrats Denny Merideth of Caruthersville and Wes Wagner of DeSoto in opposition.

Holden initially wanted $350 million in bond proceeds to plug a budget hole of like amount and said he would be forced to make up the shortfall by withholding from education. Republicans offered an alternative that primarily would shift some spending obligations to the next fiscal year.

The governor has agreed to implement some of the Republican suggestions. Those steps plus the bond revenue would fill all but $82.3 million of the hole -- assuming it doesn't grow any larger in the coming months.

While glad the House moved quickly, Holden plans to ask the Senate for enough bond revenue to cover the remaining gap when it takes up the bill on Monday. If that fails, the governor said he will tell state education officials to begin the withholding process at the end of the week.

State aid to public schools districts would be reduced by $61.3 million from currently appropriated levels. Because districts are counting on that money for the current school year, its loss would be a hardship. However, the actual amount of state money going to local schools would still be $75 million higher than it was last year.

Higher education would lose $21 million with Southeast Missouri State University taking a hit of roughly $1.1 million.

While House Republicans leaders characterized the $150 million figure as set in stone, Kinder said there could be changes.

"I don't think the Senate is going to automatically take the House bill and pass it as is, but it could happen that way," Kinder said.

Though a few senators of both parties on Friday floated the idea of tapping the state's Rainy Day Fund as an alternative, the plan likely won't go anywhere as it is doubtful House Republicans would go along with it. Holden, who wanted to access the fund last year but was stopped by the House GOP caucus despite strong Republican support in the Senate, said the idea isn't worth pursuing at the present time.

Whatever issues remain, Holden is hopeful they will be resolved this week. While the state is already taking preliminary steps so the bonds can be sold quickly, they have to be sold soon in order for the revenue to be of help in the current budget.

Not happy

Though for different reasons, few lawmakers are happy with the bill.

House Budget Chairman Carl Bearden, R-St. Charles, said it was a bad deal, but lawmakers were left with little choice in order to spare education. For weeks Republicans have expressed discomfort with what amounts to shutting off a long-term revenue stream through the bonds to address a short-term budget problem.

House Democrats, however, said the GOP decision to cap the proceeds as low as they did could leave education at risk if the budget situation deteriorates further.

"It is sort of like throwing a life preserver to the children of Missouri but not giving them a rope to pull them to shore," said state Rep. Chuck Graham, D-Columbia.

mpowers@semissourian.com

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