Budget gets OK; shortfall remains

JEFFERSON CITY, Mo. -- The state House completed work Friday on a $19 billion budget dependent on specialized tax increases and spending cuts but still unbalanced by an estimated $66 million.

Representatives were scheduled to vote next week on whether to tap into the state's emergency savings account to cover the shortfall. But even supporters acknowledged that the required two-thirds vote will be hard to achieve.

The 12-bill budget package now goes to the Senate, which already has spent weeks examining the state's financial figures in expectation of making its own spending cuts or additions.

If the legislature's final budget is unbalanced, Gov. Bob Holden would have to veto appropriations until spending matched expected revenues, as required by the state constitution.

Holden had proposed a balanced budget to lawmakers that depended on $135 million from the so-called Rainy Day Fund. The House reduced that to $66 million by cutting state programs beyond Holden's proposal and dramatically reducing the amount set aside for midyear supplemental appropriations.

The governor also had proposed to raise $220 million in new revenues -- largely from casinos -- to meet the expected growth in the formula that funds public schools.

The House reduced the amount needed to $177 million by revising the way the school formula is calculated. That allowed representatives to discard Holden's plan to raise revenue by removing the $500 loss limit for casino gamblers. The House budget still depends on some higher casino fees and the elimination of some business tax incentives.

Special tax increases also are proposed for pharmacies, hospitals and nursing homes, with the revenues used to trigger more federal Medicaid dollars.

"We've used a common-sense approach," said House Speaker Jim Kreider, D-Nixa. "The combination of cutting and enhancing revenues is the proper thing to do in this crisis situation."

Besides the funding increase for public schools, other new features in this year's budget include $73.7 million to provide a prescription drug benefit for low-income senior citizens.