Gov. Holden signs into law revenue-raising legislation

JEFFERSON CITY, Mo. -- Gov. Bob Holden quietly signed another piece of the state's budget puzzle into law Tuesday -- a bill designed to raise money partly through stricter enforcement of state tax laws.

Holden maintains that even with the additional money, the state's $19.1 billion budget for the fiscal year that began Tuesday is nearly $240 million out of balance.

The governor's budget director is expected to announce spending withholdings today of an equal amount of money, primarily affecting public education.

Holden signed the revenue-raising bill privately in his Capitol office and later issued a statement claiming he did so "despite serious concerns I have with the legislation."

The Democratic governor previously has expressed concerns about a provision waiving penalties for delinquent taxpayers who pay up during a special period from August to October.

The Republican-led legislature included the provision based on the success of a similar "tax amnesty" program last year, which was projected to generate $20 million but ended up pulling in around $70 million in overdue taxes.

While Republican lawmakers hope the program can result in the collection of an additional $10 million this year, Holden's office has projected it will raise close to nothing and expressed concerns that back-to-back tax amnesty periods could encourage people not to pay taxes on time.

The Democratic governor has been locked in a protracted battle over the state budget with Republicans who control the state House and Senate. Holden has asked for tax increases and the closing of what he calls "tax loopholes" -- some of which are included in the bill he signed Tuesday.

Republicans, however, have blocked most of his efforts, maintaining that Missourians would rather see services reduced than taxes increased.

The bill, which went into effect immediately upon Holden's signature, contains more than 20 separate provisions that each raise a small amount of revenue.

Not everyone agrees on how much money the state can expect to rake in because of the new law.

A bipartisan legislative office that places financial estimates on bills projects it will bring in it at least $84 million the first year and about $58 million in future years.

Some of that money will go toward dedicated purposes, not the state's general revenue fund. Because of that, Holden maintained Tuesday the legislation would generate $42 million. When passing the bill, Republican lawmakers had estimated it could raise as much as $111 million.

One segment of the bill would allow the secretary of state to revoke a professional license if a person does not pay his or her taxes. State employees also could lose their jobs for failing to pay state taxes.

The bill requires any company that does business with the state to be up-to-date on its taxes. And it allows the state to withhold Missourians' tax refunds when they have outstanding court debts.

The bill closes a handful of "tax loopholes" whose elimination Holden sought. It ends a double tax deduction for railroad workers' pensions and the requires the collection of taxes on gambling and lottery winnings of non-Missouri residents.

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Revenue bill is HB600

On the Net

Missouri Legislature: www.moga.state.mo.us

Gov. Bob Holden: www.gov.state.mo.us