Tax plans met with defiance as special session opens

JEFFERSON CITY, Mo. -- A special legislative session on Missouri's budget opened Monday with a few lawmakers proposing tax increases that Republican leaders indicated were likely to die.

Democratic Gov. Bob Holden called lawmakers into an extra session to refer tax increases to the ballot as a way to avoid spending cuts and correct what he claims is an out-of-balance state budget.

But as the special session began, many Republicans said they were just as firm in their no-new-taxes position as when their regular session ended May 16. And they indicated a willingness to restore only some of the money they had cut from the budget that takes effect July 1.

Holden had cited the cuts Friday in vetoing budget bills for public schools, colleges, health care and social services -- together accounting for roughly two-thirds of the spending in the $19 billion state budget.

House Budget Chairman Carl Bearden on Monday reintroduced the same budget bills Holden had vetoed.

However, Bearden said he planned to restore some of the cuts to public schools with federal aid provided by legislation recently signed by President Bush.

Meanwhile, two state senators proposed separate tax plans to generate more money for the budget.

Veteran Democratic Sen. Wayne Goode outlined a package that would ask voters to raise between $681 million and $705 million primarily from higher taxes on cigarettes and gambling. Republican Sen. Doyle Childers proposed increases in the state sales and incomes taxes, but did not have a financial estimate for his package.

Holden spokeswoman Mary Still praised Goode's proposal as a good start to the special session. Asked if Holden was concerned about Republican opposition to tax increases, Still said: "The governor remains optimistic that they'll do the right thing."

Many Republicans, however, weren't impressed by the tax proposals.

"Hell will freeze over before I vote for a tax increase," said House Majority Floor Leader Jason Crowell of Cape Girar-deau.

Freshman Rep. Steve Hobbs said his constituents have been vocal about opposing any kind of tax increase.

"All I'm getting at home now is, 'By God, I didn't send you there to raise taxes. I sent you there to shrink government, and that's what I expect,"' said Hobbs, R-Mexico.

Leading Senate Republicans said the House opposition to tax increases would make it difficult for the Senate to pass a tax package.

"I would not bet a great deal on these proposals making it to the floor" for debate, said Senate President Pro Tem Peter Kinder, R-Cape Girardeau.

Goode said his proposal would help offset the nearly $1 billion in tax cuts approved by state lawmakers in the late 1990s.

"Those cuts have put the state in the situation that we're in today," said Goode, D-St. Louis, a former chairman of the Senate Appropriations Committee. "Until we come back and correct that, we're going to have budget problems for the foreseeable future."

Goode's bill would boost the cigarette tax from 17 cents to 72 cents and raise taxes on other tobacco products 20 percent -- a proposal that was narrowly defeated by voters last November. It also would ask voters to raise taxes on casinos and impose a 5 percent income tax surcharge on Missourians making more than $200,000 annually.

Goode also proposed two other bills -- contingent upon voter passage of the ballot measure -- to remove the gambling loss limit and close what Holden describes as "tax loopholes."

Childers, R-Reeds Spring, introduced legislation that would impose a special sales tax to be phased out over three years. He also proposed a 2.7 percent surcharge on state income taxes to benefit education.

As the special session began, Holden's budget office changed its budget projections.

Holden previously had said the state budget was $367 million out of balance and contained $354 million in objectionable cuts from what he had proposed to spend on education and human services.

On Monday, Holden's budget chief raised the estimate of the shortfall to $421 million, because the state is collecting less tax revenue than expected. But she said an influx of money from federal legislation could be used to reduce the budget shortfall to $141 million.

To address that shortfall and restore the spending cuts would require lawmakers to come up with $495 million, Holden's budget office said.

Republicans have contended the budget is just $12 million out of balance.

Several groups gathered Monday at the Capitol to protest some of the spending cuts that would affect young people and the disabled.

"We are not talking about cutting fat out of government," said Beth Griffin, executive director of Citizens for Missouri's Children. "We are talking about harming people."

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