Missouri House approves constitutional amendment limiting state budget

JEFFERSON CITY, Mo. -- The House approved a proposed constitutional amendment Thursday that limits how much state budgets can grow.

State spending couldn't climb more than the sum of the rates of inflation and population growth. But spending wouldn't have to decline if drops in consumer prices or population make that figure negative.

The proposal would affect only general revenue, money over which lawmakers have the greatest discretion in deciding how to spend. The state's more than $20 billion budget includes a variety of other funds, many of which can be spent only for a specific purpose.

The proposed amendment is similar to a Colorado spending cap. Critics there have blamed it for leading to problems with funding education and social services. Supporters of Missouri's version said they've made adjustments so it doesn't force spending cuts, to avoid problems like those in Colorado.

House Budget chairman Allen Icet said a spending cap is needed to force lawmakers to not overspend.

"Having that kind of fiscal discipline is a real challenge for lots and lots of different reasons," said Icet, R-Wildwood. "But this would require the General Assembly to live within our means."

Icet said his measure would have the greatest affect in "windfall" years when state revenue was high, because that is when there is the most temptation to overspend, which creates problems when revenue declines.

Legislative staff estimates that had the spending limits created by the amendment been in effect this year, they would have required lawmakers to cut Gov. Matt Blunt's budget recommendations by $106.6 million.

But without the spending cap, lawmakers cut the governor's recommendations anyway. And Icet said it wouldn't have affected this year's budget.

Critics said the spending limits would needlessly tie the hands of future lawmakers while not solving any problems.

"I would like to be in a legislature fortunate enough to have a windfall so that we could think about how to get homeless veterans off the street, so that we could think about what we might invest in to improve the quality of life for our citizens," said Rep. Jeanette Mott Oxford, D-St. Louis. "We are so far away from that, it seems like we are trying to solve a problem that is a fantasy."

Icet, repeating an argument used by Republicans to justify an unrelated constitutional amendment earlier this session, said lawmakers shouldn't wait for a flood before building a levee.

But Democrats said there isn't much of a problem with overspending because the state hasn't had "windfall" profits in years.

"I would not build a levee on the top of a mountain or in the desert where there is no water," said House Minority Leader Paul LeVota, D-Independence.

The measure, which was approved 84-65, would go on the ballot if approved by the Senate.

Besides limiting spending, the amendment also creates new state financial accounts to capture state revenues that exceed lawmakers' expectations. After those funds hit their maximums, the state tax rate would be reduced for the next tax year.

The state already has a reserve fund to cover emergencies, but Icet said it's too difficult to use because state law requires repayment within three years. The proposed amendment would extend the deadline to five years.

The spending cap bill is HJR70.