Spending cuts are favored in state budgets

JEFFERSON CITY, Mo. -- As the Missouri Legislature resisted pressure to raise taxes this year in favor of spending cuts, most other state legislatures chose a similar course of action in crafting new state budgets amid a continuing financial crunch.

According to a recent report by the National Conference of State Legislatures in Denver, 31 of the 43 states that had finalized their fiscal year 2004 budgets when the study was being conducted had cut spending.

Meanwhile, only 17 states enacted broad-based tax increases, such as income or sales taxes. Some states employed a combination of spending cuts and tax increases in their budget-balancing efforts.

Corina Eckl, an NCSL analyst who helped author the report, said the reliance on spending reductions came as little surprise as a substantial number of lawmakers and governors promised not to raise taxes during last year's election campaigns.

"We are in an anti-tax climate," Eckl said. "There is little appetite for tax increases."

The $19.1 billion budget Missouri lawmakers approved for the fiscal year that began July 1 slightly boosted overall spending from what had been approved for the previous year. However, because of mandatory increases in programs like Medicaid, funding reductions for education, health care, social services and other areas were still needed in the absence of additional revenue.

Gov. Bob Holden, a Democrat, pushed hard for new taxes and other revenue sources, but the Republicans who control both legislative chambers had no enthusiasm for such proposals.

State Rep. Peter Myers, a member of the House Budget Committee, said the actions by other state legislatures to get spending under control shows Missouri Republicans were in line with a national trend, contrary to Democratic ads that painted the budget-cutting efforts as draconian.

"Everybody to a person who called me said 'Don't raise taxes; don't give in,'" Myers said. "Many of these were people I didn't know."

Myers, R-Sikeston, said the difficult task of controlling state spending will continue in January when lawmakers begin work on next year's budget.

$900 million hole

Holden's budget director estimates that the state will begin the FY 2005 budget process with as much as a $900 million hole to fill because of further growth in mandatory programs, the reliance on one-time revenue that will need to be replaced and other factors.

Eckl, the NCSL analyst, said there is guarded optimism that the financial woes that have troubled some states for as many as three straight years will dissipate during the course of the current fiscal year.

"There is some robust growth being reported, so we might turn the corner," Eckl said. However, she said this won't be clear until the end of 2003.

mpowers@semissourian.com

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