Mo. Chamber of Commerce urges changing state budget process

JEFFERSON CITY, Mo. -- The Missouri Chamber of Commerce suggested Thursday that the state change its budgeting process to limit the potential for growth in state spending.

Missouri's annual budget currently is based on revenue estimates developed by economists and agreed to by the governor and legislative budget leaders.

The so-called "consensus revenue estimate" is developed each December for the fiscal year that starts the next July.

A report by the Chamber of Commerce recommended the budget be based on the actual state revenue for the previous year, minus any expected cuts. That would curtail, or at least delay, the growth of the state budget.

For example, because the state currently is in the 2003 fiscal year, the chamber's plan would call for the governor and Legislature to use the actual revenue from fiscal year 2002, which ended last June, when preparing the fiscal year 2004 budget, which starts next July.

'Notoriously inaccurate'

The state's revenue estimates "are notoriously inaccurate year after year," said Dan Mehan, president of the Missouri Chamber of Commerce. "Our suggestion is to go back and use an actual number where you know revenue came in at .... use that as a basis point to craft a budget."

Under such a scenario, the growth of budgets would lag behind any growth of state revenue, meaning the state could build a surplus in good years that could be used in poor years, the chamber said.

The Chamber of Commerce released its report on the same day that Gov. Bob Holden held a public meeting in Kansas City to discuss the state's budget troubles and his plan for eliminating certain business tax breaks. Holden plans similar sessions in Columbia, Springfield and St. Louis.

To help balance the next budget, Holden has proposed eliminating between $70 million and $100 million of what he considers business "tax loopholes."

The chamber rejected Holden's characterization of his proposal.

"These things are not loopholes," Mehan said. If you do away with them, "they are a tax increase."

Because the state is facing budget troubles and needing to make cuts, the chamber suggested the state roll back its spending plan by several years. The chamber said the fiscal year 2002 general revenue collections were similar to those in fiscal 1999, so the state should constrain its next budget to the $15.1 billion spent in 1999.

That would be a 20 percent reduction from the current $18.9 billion budget.

"While this rollback may seem painful to those dealing with the budget cuts, state government needs to live within its means," the Chamber of Commerce report said.

------

On the Net

Chamber of Commerce: http://www.mochamber.org