Holden threatens to veto Senate budget

JEFFERSON CITY, Mo. -- Gov. Bob Holden threatened Monday to veto a state budget proposal pending in the Senate and urged lawmakers to send him a plan with fewer spending cuts and more tax increases.

The Democratic governor said the cuts proposed in the Senate would have devastating effects on education, social services and numerous other government programs.

Republicans, who control both chambers of the legislature, have been reluctant to embrace much of the $700 million in new revenue proposed by Holden when the session began in January.

Instead, the House passed a budget last month balanced entirely through cuts, although the legislation leaves it to department directors to decide the specifics.

The Senate Appropriations Committee rewrote the budget last week to include the possibility of new revenue. That plan, being considered by the full Senate this week, includes almost $600 million in spending cuts. But $200 million of those cuts could be avoided if the state comes up with more revenue than expected.

'Unacceptable'

At a news conference Monday, Holden called the Senate committee plan "unacceptable."

"We now have three weeks left in the session and I have seen no credible plan emerge from the Republican leadership," Holden said.

The Missouri Constitution requires the legislature to give final approval to a budget by May 9.

Holden said he would veto any budget that is balanced only with cuts and one-time revenue sources rather than with permanent tax increases that would shore up future government revenue.

If Holden vetoed the budget, he likely would have to call lawmakers into a special session to reconsider it before the next fiscal year begins July 1.

Senate Appropriations Committee chairman John Russell said he expects a special session.

Holden's comments "would lead me to believe that he's not seriously ready to deal with the budget," said Russell, R-Lebanon. He called Holden's veto threat "almost disrespectful" to the legislative staff who had spent long hours on the budget.

'Political response'

Senate President Pro Tem Peter Kinder, R-Cape Girardeau, criticized Holden's remarks as a "political response to the bipartisan effort of our Senate Appropriations Committee to balance the budget."

As part of the budget debate this week, the Senate is expected to consider a bill that would raise an estimated $200 million in revenue, through higher casino taxes and a repeal of the state's unique $500 loss limit for each two-hour gambling session.

Other provisions being considered would save money by offering retirement incentives to state employees and by requiring banks and businesses to turn over unclaimed property more quickly to the state.

Holden included the casino and retirement measures as part of his January proposal for raising about $700 million.

He also proposed higher taxes on tobacco products and the elimination of some tax breaks.

Because of the size of the tax increases, much of Holden's proposal would be subject to a statewide vote.

Republican legislative leaders say voters expressed their desires last year by rejecting three proposed tax increases, including a tobacco tax similar to what Holden wants to put back on the ballot.

But Holden said legislators have failed to come up with a better alternative for avoiding cuts that he said could result in the layoff of 5,000 teachers, tuition increases of 15 percent at state colleges and the elimination of treatment services for 3,500 mentally or emotionally disturbed adults and children.

"To date, there is no consensus from the Republicans in the Senate," Holden said. "We are three weeks out and nothing has emerged but chaos. It's gotten to the point I am almost embarrassed for them."