FLOOD TAX ON TABLE AT SPECIAL SESSION

Area legislators say they are receptive to a sooner-than-expected state gas tax hike as a way to generate revenue for repairs of flood-damaged roads and bridges.

But most are wary of other tax increases to pay for flood damage, contending that new taxes should be a last resort.

In 1992, the General Assembly enacted a 6-cent gas tax, to be phased in with 2-cent increments. The first two cents took effect immediately, and additional increments are scheduled to start in April 1994 and April 1996.

State fuel tax money must be used only for transportation, so other funds would be needed to cover the state's share of federal matching funds and other flood costs.

"Since the gas taxes are already in the pipeline, it seems rational to accelerate those; it strikes me as a reasonable first step," said Sen. Peter Kinder, R-Cape Girardeau.

"I have no problem with an early gas tax," said Rep. Dennis Ziegenhorn, D-Sikeston.

Rep. David Schwab, R-Jackson, added: "I could consider that for road damage. With all the damage, it may be the only practical approach we've got."

Rep. Mary Kasten, R-Cape Girardeau, agreed that accelerating the gas tax increase "seems like a very logical way to do it.

"The infrastructure damage is what will be so harmful to our economy as a whole, and we need to get these many miles of roads back in shape," she added.

Rep. Larry Thomason, D-Kennett, said the state has no alternative but to repair damaged roads, and without new money, other projects will be delayed or halted.

Said Thomason: "I don't have any problem moving the gas tax ahead. I don't think it would be a big deal. Everybody would agree that is necessary - these are extraordinary circumstances, not just a whim."

Legislators anticipate that Gov. Mel Carnahan will call a special session to deal with paying for the flood costs. The session could take place near the time of the annual veto session, Sept. 15.

"It's all kind of tentative right now, but the likelihood is pretty high we will have a special session," said Chris Sifford, communications director for the governor.

"Part of our problem is that we are going to talk about appropriations and how much it is going to cost the state, and we don't know how much it will cost the state at this point. We are working frantically to get all our ducks in a row."

Recent estimates by state highway officials are that it will take $145 million to repair roads in Missouri, and only about $65 million of that will come from federal funds. And officials warn those estimates could increase.

"If we don't accelerate the gas tax, some projects under construction now or being planned will have to be delayed, and I don't think the people want that," said Thomason.

Clouding the issue is the difficulty in determining the extent of flood damage. While waters are receding rapidly, it could be a month or more before anyone can make a full assessment of the damage done to public and private property in Missouri.

Also unknown is how much the federal government will contribute. Also, the required state match varies with some programs.

Sifford said that until damage estimates have been compiled and there is a clear understanding of what funds the state needs, it is difficult to come up with a proposed financing plan for the legislature to consider.

"We really can't afford to wait because we have too many people out there who have pretty significant problems and it is important that we be as responsive as we can," Sifford said. "But a lot of our response will come down to dollars."

Thomason said he is disappointed the federal government has failed to lift the state and local matching fund requirements for disaster assistance, as it did with Hurricane Andrew several years ago.

Sifford said Carnahan has met several times with President Clinton and is working through the National Governors Association to get increased federal relief.

A special joint panel of the House Budget Committee and Senate Appropriations Committee will begin meeting Friday as a step toward determining the extent of flood damage in Missouri and possible methods of funding the cleanup. Rep. Kasten will serve on the subcommittee.

"We need to get a lot more information before we decide exactly what to do," Kasten said. "We need to assess damages and see where we are. It may take a while after waters go down to get an authentic estimate."

Kasten is hoping the state will get more money from the federal level, but admits it may be necessary to find new sources of revenue beyond the gas tax increase.

"I'm afraid we may be looking at additional money," said Kasten. "No one could have anticipated this. We were very close in our budget this year, and there are no extras in it at all."

Kasten said damage estimates are staggering, with the latest figures showing $4 billion in property loss, half of which is agricultural. Over 3,000 businesses were damaged by flooding, more than 25,000 people were evacuated, and 25,000 workers were laid off as a result of the disaster.

If part of the financing plan involves re-allocating revenue in the Fiscal 1994 budget, lawmakers will have to approve it through the legislative process, Kasten said.

Sifford said Carnahan and members of the executive branch will work closely with the appropriations subcommittee to try and come up with a workable plan.

"The governor will make some significant proposals, but our options are pretty broad at this point," said Sifford.

Schwab said he's skeptical of any tax increase for flood relief other than speeding up the gas tax.

"I am not receptive to any other kind of tax increase at this time," said Schwab. "I would want us to tighten our belt as much as possible with our own budget first.

"This is a crisis and it has hit us hard, but we should try to rearrange priorities in our state budget to deal with it."

Kinder said additional taxes should be a last resort.

Said Kinder: "My hope is that we could do it without a tax increase, however, if one was needed, I would want it to be of absolutely limited duration, with a specified time for it to end... an ironclad guarantee it would end and not be a perpetual source of revenues for government to do other things with."

Thomason said he is not thrilled about tax hikes either, but warned it would be unwise for legislators "to bury our heads in the sand.

"One idea that sounds reasonable, if you have to do it, is with a bond issue to be paid off with something like a quarter-cent sales tax for four or five years. The plan should be done in such a way that it is not extendible."

Ziegenhorn said if a tax is needed, he favors getting one enacted immediately, while memories of flood damage are fresh on everyone's mind.

"Memories aren't very long, and we need to do something as quick as possible," he said.

Ziegenhorn said a one-cent sales tax would generate $450 million annually.

"I have no problem putting a sales tax on for a period of time, but I definitely want a sunset," he added.