HANCOCK PROBLEMS DESCRIBED AT FORUM

Betty Westrich of Benton summed up taxpayers' frustration Monday: She is tired of taxes being raised without a chance to vote on them.

Westrich voiced her sentiment at a forum on Amendment 7, otherwise known as Hancock II, at Southeast Missouri State University.

The Missouri Constitutional amendment is on the November ballot.

Westrich said she feared government spending would jeopardize her children's and grandchildren's future.

Former state budget director Jim Moody said Hancock II would force votes on tax increases but would go much farther and could lead to immediate and massive cuts in state services.

Moody talked against Hancock II at the forum.

The cuts, he said, would leave people "shocked."

"If this was just about voting on future tax increases, I don't think I would be here," he said.

Moody told about 125 people at the forum that U.S. Rep. Mel Hancock devised a complex plan with serious flaws.

Others speaking against Hancock feared what the predicted cuts would do to education and programs for the elderly, youth and adults with special needs.

Moody said discretionary services would be at risk if Hancock passes, adding: "There has always been competition for dollars between agencies but never of this magnitude and in this short of a time frame."

Confusion exists about Hancock II's impact -- some put it at between $1 and $6 billion -- and legal challenges are expected.

But Moody said parts of the amendment are clear enough to trigger immediate cuts.

Voters passed Hancock I in 1980. It put a revenue limit on the state that remains in force with Hancock II.

What changes in the new version is what must be counted to determine the new revenue limit.

In the new version, $550 million generated from the 1-cent sales tax of Proposition C -- passed in 1982 -- $150 million generated annually from the Proposition A gas tax increase -- passed in 1987 -- and revenues from a new local use tax, all are included as part of the revenue.

Moody said in the current fiscal year, those three sources would move the state from being about $200 million under the Hancock revenue limit to more than $550 million over.

He predicted cuts for this fiscal year and next would total more than $1 billion.

Also, some tax increases approved as constitutional amendments by voters that aren't figured in total state revenues under Hancock I are put into a new category of "other revenues" under Hancock II and have to be considered in determining the growth limit.

Further complicating the problem is that of the $6.6 billion defined as total state revenue, budget cuts would have to come out of only about $2.8 billion that doesn't stem from constitutional requirements, federal court mandates, earmarked funds or essential expenses.

It isn't certain whether the new version would include federal funds in determining state revenues.

Moody said that if the courts make a strict interpretation of the measure, federal funds also would be counted as state revenue. That scenario could trigger up to $5 billion in spending cuts.

Excess state revenues would be distributed as income tax refunds.

But Moody predicts the refunds would be minor for average Missourians, totaling about $50 for people making $20,000 and less.

"Reductions in quality of life caused by cuts would be far greater than any small refund you would get," he said.

Westrich said after the forum she was angry that the state legislature and Gov. Mel Carnahan pushed through a $380 million tax increase last year without seeking voter approval.

She argued that most citizens, when given the facts, can make reasonable decisions about tax increases.

"We need to send a simple message to the governor and the legislature that enough is enough," she said, adding that the people aren't stupid and legislators should wake up to that fact.

But, Westrich said she plans to vote against Amendment 7 because it goes too far.

Hancock II opponents are counting on Missouri voters drawing the same conclusion.

The Southeast chapter of the Missouri Association for Social Welfare sponsored the forum.