NO TAX: SPECIAL SESSION IS CALLED

Missouri Gov. Mel Carnahan said Friday he will call a special session of the General Assembly, in conjunction with the annual veto session, to deal with legislation related to flood recovery.

Area legislators, who were anticipating the special session call for weeks, were somewhat surprised and quite pleased that the governor's plans do not include a hike in taxes.

"I'm glad we finally know so we can make our plans for September," said Sen. Peter Kinder, R-Cape Girardeau. "I am delighted that the governor is not proposing a tax increase and am delighted that the estimates of the state's cost share are lower than what was originally forecast."

Originally, the governor had warned it might be necessary to expedite two-cent-per-gallon increases in the state's fuel tax, which are scheduled to take effect in 1994 and 1996, and enact a short-term sales tax to cover the state's share of flood damage costs.

However, road damages are apparently less than originally feared, and federal funds will help repair much of the damage. Also, the federal government's share of some flood damage will run 75 percent on some projects and up to 90 percent on others.

Carnahan, at a news conference Friday morning, said he would call the special session for Sept. 15, which is the same day a veto session will begin.

The governor vetoed a half-dozen bills that were passed earlier this year and there is little support for overturning any of the them. Veto override debate will likely be limited this year.

Special sessions must be called for a specific purpose and can run up to 60 days. However, the governor and legislative leaders predicted the flood assistance matters could be taken care off in much less time.

One of Carnahan's legislative proposals would authorize the sale of $45-50 million in 25-year general obligation bonds to pay for rebuilding flood-ravaged state facilities. Most of that money would be used to rebuild the Renz Correctional Center, a women's prison in Jefferson City, devastated by the Missouri River. Funds would also be made to repair parking lots around the State Capitol and repairing the State Health Laboratory, which had major damage.

Carnahan is also proposing a constitutional amendment to merge the Rainy Day Fund, which has more than $27 million and sets aside money for emergencies, and the Cash Operating Reserve Fund, which has $196 million and provides a cushion for meeting seasonal cash flow needs.

Both proposals would need voter approval, and Chris Sifford, Carnahan's communications director, suggested an election would be scheduled in December.

Sifford said the governor had consulted with House and Senate leaders and members of a special joint committee of House and Senate appropriations committee members about his plan.

"There was a definite effort to get input before this plan was developed," said Sifford.

Cape Girardeau County state Reps. Mary Kasten and David Schwab both share Kinder's delight that the governor is not calling for a tax increase.

Said Kasten: "This plan sounds like a good way to avoid taxes and take care of the problems we have. I need to see more details about it, but it is certainly more plausible than a tax increase."

Schwab added: "I think we need this special session and it is good he called it in conjunction with the veto session. I'm definitely glad he's not looking at a tax increase. I don't feel like I can support a tax increase."

Kasten, a Cape Girardeau Republican, will get a close look at Carnahan's proposal on Wednesday when the special flood committee that she serves on meets in Jefferson City.

"After our meeting hopefully we will have more hard figures and a clear idea of what the federal government is going to do," said Kasten. "These are good directions to forge than more taxes, but we will have a better idea after next week."

Schwab points out that even with a bond issue, the money will have to come from somewhere. The Jackson Republican hopes a review of the current state budget will be made to look for potential cuts first.

"There is nothing wrong with going back in the budget and making some cuts. We have done that in the past when revenues have not come through," said Schwab. "That is what we would do if we had a crisis in our personal life. Even though the budget is approved, we should have no problem making adjustments."

Kinder added, "I want to scrutinize very carefully how we will pay for these bonds."

All three also want to study Carnahan's plan to merge the rainy day and cash reserve funds and to understand exactly what that means.

"I hate to give up the Rainy Day Fund because we worked so hard to get it in place and funded," said Kasten. "I want to look at that idea very closely."

Schwab said he also has some concerns about whether merging the funds could take away reserve funds that are needed for state cash flow.

"I want to look at that," added Kinder. "I don't know what that means.

"I am eager to get up there, get the work done, and put it behind us."

Senate President James Mathewson and House Speaker Bob Griffin both praised the governor for taking a no-tax approach to the flood problem. Many lawmakers were concerned about a tax increase after they had enacted a $315 million hike for education during the last session.

"Nobody wants a tax increase," said Griffin.

"I am very pleased that Gov. Carnahan is taking this ultraconservative approach to the biggest disaster that's ever happened to the state of Missouri," said Mathewson. "This is the right approach."

Carnahan said he expects the flood issues to be resolved quickly. "Our main focus is to provide Missourians with the help they need to get through this crisis," said the governor. "The special session is an important part of the process."

The last time a special session of the legislature was called was in 1989 when a temporary tax increase was approved to make court-ordered tax refunds to federal retirees.

The last time Missouri voters approved a major general obligation bond issue was in June 1982, which raised $600 million for various building projects around the state.