CARNAHAN SAYS HE WANTS EDUCATION TAX PROPOSAL TO STAND BY ITSELF

JEFFERSON CITY - Gov. Mel Carnahan said Wednesday he will fight any efforts by legislators to load up his education tax increase plan with other programs.

Adding funding for other programs to the plan will only diminish its chances of winning voter approval, the governor said.

Carnahan said he was optimistic voters would vote for a tax hike if "we can be straightforward and direct. The challenge will be to keep this from being loaded up like a Christmas tree.

"The real opponents will be people wanting to help us by putting those things in it."

In November 1991, Missouri voters soundly rejected a tax increase package for education. Many felt the plan failed because it was too large, had too many programs, and because it was unclear to voters what their school district would get in return.

Carnahan said he hopes to learn from the failure of Proposition B.

"We have got to be able to tell people what they are going to get from this plan," declared Carnahan.

In his State of the State address Wednesday, Carnahan urged lawmakers to draft a new school foundation formula and to support his package creating "world-class schools" in Missouri. The governor did not outline details of his plan in the speech, but said legislators understand that more money will be needed to improve education.

Carnahan, discussing his budget at a luncheon Wednesday with representatives from eight newspapers around the state, said he will present his tax plan to legislators later.

He explained that $100 million would be needed to fund the "hold harmless" provision of a new school foundation formula. "It can't be done without it," Carnahan declared.

"I had hoped several months ago that we could fund the hold harmless out of growth, but that's just not possible."

To enact his world-class schools program, Carnahan said, would take a state tax increase of another $100 million and an additional $100 million in local money from school districts.

The governor did not specify how the local money would be raised, but noted, "it will be worth their while to come in."

The $200 million in state revenues would come from a combination of increases in the corporate income tax, an income tax increase on large filers, and an increase in the state cigarette tax. Carnahan said he hopes to have the proposal before voters in August.

Although his plan does not include increased money for higher education, Carnahan said education leaders generally agree that elementary and secondary education is where the state needs to begin. "That's our focus; that's where we have to start," he observed.

"I will not ask voters to spend money for the same schools or worse schools, only for better schools."

Carnahan conceded that all areas of state government need additional revenue, but insisted the only tax increase he would support this year is for elementary and secondary education.

Asked how much it would take to catch up with all the needs that have not been funded in recent years due to tight financial conditions, the governor replied: "I don't know, but it's a scary figure."

Since winning the governor's office on Nov. 3, Carnahan has worked to develop a close relationship with Democratic leaders in the General Assembly. But while he has outlined his education plan with them, Carnahan said Wednesday that House Speaker Bob Griffin or Senate President Pro Tem James Mathewson have not committed themselves to fighting off attempts to add other tax proposals to his plan.

"That's going to be the fight, " said Carnahan.

The governor expressed optimism that progress could be made this year to settle the desegregation cases in St. Louis and Kansas City. The cases have cost the state $1.7 billion since 1981, and costs are still climbing.

"It is time to bring these costly and prolonged actions to a conclusion," Carnahan said. He promised to work closely with Attorney General Jay Nixon to seek a settlement. He said there are indications federal officials are willing to work toward an end to the cases.

In his State of the State address, Carnahan suggested that a third party should get involved to help settle the cases. "The neutral party would be someone named by the judges to move between the parties to find where we are in agreement," explained the governor.

"It can't be the state's person. It has to be someone they will all buy into."

Carnahan said he hopes to see a major drop in the state's desegregation costs during his term.

The governor also said the attorney general will take the lead in proposing reforms in the Second Injury Fund, which was a major issue in the statewide campaigns this year.

Completing the budget document for fiscal 1994 was a difficult task, but Carnahan said overall he was pleased with the way some funds were shifted to meet new priorities.

"I was distressed at how tight the budget was," he said.

Using 4.7 percent revenue growth for next year and with $58 million in core cuts, the state has only $28.3 million left in new discretionary funding after all mandatory expenses are taken out, explained Dick Hanson, commissioner of the Office of Administration.

For the first time in several years, the budget includes a pay increase for state employees. The increase will average 3 percent, with each employee getting a 1 percent increase plus $400.

Funds for the employee pay hike will come partially through cuts in personnel achieved by attrition in most state departments.

The budget also reflects a constitutional amendment passed by voters last year earmarking all lottery revenues for education. Hanson said the end result will be an additional $35 million going to education in fiscal 1994.

The state is under pressure to comply with the Americans with Disabilities Act guidelines. Projects needed to bring Missouri facilities into compliance will be phased in over two years.