Holden to spare employees in cuts

JEFFERSON CITY, Mo. -- Gov. Bob Holden plans to cut more than $200 million from the state budget without laying off any state employees, officials in Holden's office said Thursday.

The governor, who already has vetoed or cut $359 million from the $19 billion state budget, is to announce the latest round of cuts today.

A recession worsened by the Sept. 11 attacks has caused state tax revenues to fall significantly below projections. Legislators and the governor's office worked Thursday to revise the state's revenue estimates for the remainder of the fiscal year that ends June 30.

Just last week, Holden budget director Brian Long estimated that $150 million to $200 million in additional budget cuts would be needed.

Long said Thursday that the figure had grown to between $200 million and $225 million. Lt. Gov. Joe Maxwell confirmed those figures.

While the amount of cuts is rising, the chances of Christmastime layoffs appear to be declining.

"The likelihood of state employee layoffs has diminished," said Holden spokesman Jerry Nachtigal. "They're thinking they can find ways around that."

Delay project funds

One way to save money without layoffs is to cancel or delay state grants for projects that have been authorized but not yet funded, Maxwell said. The theory is that it's easier to delay money for new projects than it is to take money from the budgets of existing programs.

Along those lines, Holden could tap into the state's revenues from a settlement with big tobacco companies. Much of that money is intended to go to health-care and anti-tobacco efforts. But because this is the first year of those appropriations, there are no existing programs dependent on the tobacco funding stream.

Holden already has withheld $25 million of tobacco funds that had been appropriated for a new state health lab. Legislators also used $127 million from the tobacco settlement to cover a budget shortfall in the 2001 fiscal year that ended June 30.

Long said that everything is on the table except cuts to K-12 education.

The basic funding formula for elementary and secondary schools also was spared cuts during Holden's previous budget withholdings.

Cuts announced in late August, for example, saved money by leaving open hundreds of vacant state positions and canceling expenditures for such things as new computers, job training and some traveling.

Some of the larger cuts were to the departments of Corrections, Mental Health and Social Services.

For latest round of budget cuts, "the pain is spread," Nachtigal said.