Republicans say they'll reject tax increases

JEFFERSON CITY, Mo. -- A Republican-controlled committee is poised to reject proposed tax increases that supporters say are vital to curing Missouri's budget woes.

Republicans on the Senate Ways and Means Committee say they aren't likely to vote for any of the seven revenue-raising bills heard Wednesday by the panel. A vote is scheduled for today.

"There are some ideas we need to look at, but they are going to take a long time and they should not be dealt with in a special session," said Sen. Dan Clemens, R-Marshfield.

Clemens and committee members Sen. John Griesheimer, R-Washington, and Sen. John Cauthorn, R-Mexico, all said Wednesday they would vote against the bills.

Republican Sen. Carl Vogel, of Jefferson City, the committee chairman, said last week he would vote against the proposals. Vogel was absent Wednesday because his daughter was injured in a car accident this past weekend.

Republicans hold a 4-3 advantage over Democrats on the committee. If Vogel remains absent today, a 3-3 vote would still defeat the bills.

Democratic Gov. Bob Holden called lawmakers into the extra session to consider asking voters to raise taxes as a way to avoid spending cuts and correct what he says is an out-of-balance state budget.

Holden has advocated higher taxes on tobacco users, casinos and wealthy Missourians, as well as the elimination of corporate "tax loopholes."

Republicans, citing voter rejection of tax proposals last year, have said there is no reason to refer taxes to the ballot.

On Wednesday, Democratic Sen. Wayne Goode, of St. Louis, outlined a package of bills that would ask voters to raise as much as $706 million next fiscal year by accepting most of Holden's proposals.

The bills generate $228 million through higher tobacco taxes, $142 million through higher casino taxes and repeal of the gamblers' loss limit, $12 million from an income tax surcharge on people earning more than $200,000 annually, and $324 million through elimination of "tax loopholes" and other tax code changes.

Goode said the state needs more money largely because lawmakers approved nearly $1 billion in tax cuts in the late 1990s.

"The taxes that we cut ... took a big hunk out of our ongoing revenue stream, and that's the problem we're dealing with today," Goode said. "It's an unusual situation and one that's not going to go away."

As it stands, a Senate budget proposal for the fiscal year starting July 1 is about $173 million out of balance and includes $579 million in one-time revenue sources that will have to be replaced in the fiscal 2005 budget, Goode said while citing figures from Holden's budget office.

"Unfortunately, next year we're going to have a problem that dwarfs the problem this year," added Republican Sen. Doyle Childers, of Reeds Spring, who outlined his own revenue package.

Childers' proposal would ask voters to impose a one-half cent sales tax that would be phased out over three years. That would generate about $198 million for the coming budget year, he said. A separate bill by Childers would revamp public school funding by lowering property taxes and raising state income taxes, with a net gain of $54 million next year.

Sen. John Russell, R-Lebanon, proposed capping most state tax credits at a total of 1 percent of the state's general revenue collections. Among the items excluded from the cap would be property tax credits for seniors. Russell estimated his bill would save $244 million for the 2005 fiscal year.

Sen. James Mathewson, D-Sedalia, also proposed asking voters to consider removing gamblers' loss limits and increasing casino taxes from 20 percent to 21 percent. He said his proposal would raise $68 million in the first year.

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Revenue bill are SBs1-7.

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