Lawmakers near completion of state budget

JEFFERSON CITY, Mo. -- The process of sending a nearly $19 billion state operating budget for the upcoming fiscal year entered the home stretch Thursday with the spending plan for now at least $200 million out of balance.

The House of Representatives and Senate began the final debate on the various appropriations bills after a negotiating team worked out differences between the budget proposals both chambers previously had passed.

As of 11 p.m., lawmakers had sent 9 of the 13 bills that make up the operating budget to Gov. Bob Holden. The constitutional deadline for finishing the job is 6 p.m. today. Even if they make the deadline as anticipated, a special legislative session appears likely as Holden, a Democrat, has vowed to veto the budget, which he considers underfunded.

On most of the bills, the votes were largely along party lines with most minority Democrats in opposition.

In terms of total dollars, the proposed budget for the fiscal year beginning July 1 would increase state spending by $51.7 million from current appropriated levels. After subtracting $1.2 billion set aside for taxpayer refunds, however, actual spending would drop by $33.9 million dollars, not quite 0.2 percent.

The Republican-controlled legislature's final budget contains $329.7 million, or 1.7 percent, less spending than Holden requested. Republican lawmakers were unwilling to ask voters to approve major tax increases and other revenue-raising methods Holden proposed in January.

Getting the present budget plan in balance will require passage of a proposed patchwork of small targeted tax increases, the closure of some loopholes in the tax code and other efforts to raise approximately $200 million. Lawmakers will focus on those efforts once the budget is done.

However, it still may not be enough to achieve balance.

State Rep. Denny Merideth, D-Caruthersville, said that while the Republican budget plan factors in the expected new revenue, it doesn't take into account other legislation that will increase costs to the state. Merideth, a member of the House Budget Committee, said that could mean $50 million to $100 million in additional, unbudgeted expenses.

"I don't think we as a body have really been confronting that issue the way we should," Merideth said.

Mandatory spending increases in certain segments of the budget forced substantial cuts in others, especially education and various health and social service programs.

Did best they couldThe Republican budget chairmen in both chambers said they did the best they could with what they had.

"To say that this is a perfect budget would be a stretch, of course," said state Sen. John Russell, R-Lebanon.

State Rep. Carl Bearden, R-St. Charles, said lawmakers made difficult decisions as to cuts but that was more prudent than building a budget based on tax increases that voters might reject.

"This budget is responsible," Bearden said. "It is not something anyone on this floor wants to do, but we have to do it."

However, House Minority Floor Leader Mark Abel, D-Festus, said the reliance on certain revenue that won't be available next year, such as $185 million from a bond sale, only postpones some tough choices.

"We can't keep going down this road with one-time fixes and borrowing," Abel said.

Of the 16 executive branch departments, nine would receive overall funding increases while seven would experience cuts.

Most of the departments slated to get funding boosts would still experience cuts in general revenue -- the state's primary and most flexible funding source. The increases were provided by additional federal money and other dedicated funds that can be used only for limited purposes.

The budget anticipates $492.2 million in additional federal money while general revenue is expected to drop by $103.4 million.

Education takes biggest hitEducation, which relies primarily on general revenue, would take the biggest hit in terms of actual dollars.

Spending for the Department of Elementary and Secondary Education, which had been largely spared budget cuts in the last couple of years, would be sliced by $170.1 million, or 3.7 percent.

The Department of Higher Education, which has borne a large portion of the state's recent financial problems, would experience another $83.3 million cut for a 7.6 percent reduction.

Southeast Missouri State University's share of the cuts would be $3 million, leaving it with a $42.3 million state appropriation.

The Department of Mental Health would receive the largest dollar increase -- $226 million -- but that is because some federal Medicaid funds that used to pass through the Department of Social Services are now being appropriated directly to mental health. Psychiatric services for the poor and programs for the mentally disabled and substance abusers would lose funding.

Social services spending would rise by $155.7 million, mainly due to increased costs for state and federal entitlement programs. However, it would be harder to qualify for many of those programs. Nearly $4.9 million would be saved by cutting compensation to people who act as foster parents to their grandchildren.

The Department of Corrections would experience a budget increase, though only by $8.7 million.

The Southeast Missouri Correctional Center in Charleston, Mo., would get $1 million of that increase, boosting its budget to $11.8 million. The additional money would enable the prison to open its final wing and hire the additional staff needed to complete it's upgrade to maximum security status.

After going two years without cost of living adjustments, some state workers will get pay increases. However, only those who make under $40,000 annually will get the $600-a-year raises. Negotiators deleted a House-backed proposal to set aside $9 million for additional raises for the Missouri State Highway Patrol.

The budget also calls for an additional $24.6 million to cover increased employee health care costs.

mpowers@semissourian.com

(573) 635-4608

A look at the legislature's proposed budget

The Missouri Legislature was working Thursday to pass a state budget for the 2004 fiscal year, which starts July 1. Here is how the budgets for each agency would compare to their current budgets.

DEPARTMENT 2003 2004

Public Debt $111 million $105 million

K-12 Education $4.6 billion $4.5 billion

Higher Education $1.1 billion $1.0 billion

Revenue $1.6 billion $1.7 billion

Transportation $1.9 billion $1.8 billion

Administration Office $807 million $829 million

Agriculture $33 million $35 million

Natural Resources $338 million $332 million

Conservation $125 million $127 million

Economic Development $260 million $274 million

Insurance $15 million $15 million

Labor $130 million $153 million

Public Safety $363 million $349 million

Corrections $566 million $574 million

Mental Health $703 million $929 million

Health $510 million $452 million

Social Services $5.4 billion $5.5 billion

Elected Officials $81 million $85 million

Judiciary $164 million $161 million

Public Defender $31 million $29 million

Legislature $35 million $31 million

Leasing $53 million $50 million

TOTAL $18.9 billion $19 billion