Budget - Carnahan's legacy

By Josh Flory

JEFFERSON CITY, Mo. -- Before his death, Gov. Mel Carnahan was a polarizing figure in Missouri politics. Supporters touted him as the "education governor," while critics dismissed him as "Tax Man" Carnahan.

But when the history of his administration is written, Carnahan's legacy might not match either of those sketches. Instead the most lasting impact from his eight-year tenure might be the tax limitation measure that voters approved in 1996, dubbed the "Farmahan" Amendment because of the strong backing from Carnahan and the Farm Bureau.

Seven years later, state policymakers are feeling the squeeze from Farmahan. Facing a $1 billion budget hole in 2004, the constitutional amendment ensures that lawmakers can't raise taxes by more than $74 million -- barring changes to the federal tax code or other hits to state revenue -- unless voters sign off on the hikes.

Whether that's good or bad depends on your point of view, but one thing is certain: It makes it harder to climb out of a budget hole.

Policymakers "have to be concerned about what voters are thinking," said David Valentine, a University of Missouri-Columbia analyst and former head of research in the state Senate.

"But in this case it's more than being concerned. They have to be able to identify things that, if they wanted to raise taxes, voters would approve. That makes it much more difficult." That dynamic was made clear in Gov. Bob Holden's State of the State speech, when he called for higher taxes on casinos, smokers and households that earn more than $200,000.

"You don't have to gamble, and you don't have to smoke," the governor noted. ... The implicit message was that the taxes proposed by the governor were reasonable, and therefore reasonable legislators could be confident that reasonable voters would approve them.

But voters are a wild card, and they've been a little cranky of late. In August they trounced a transportation tax increase that was put on the ballot after a tense debate in the legislature, and three months later they narrowly defeated a cigarette tax hike with an identical price tag to the one now supported by Holden.

With Republican majorities in the House and Senate, tax increases are now a tougher legislative sell. On the other hand, lawmakers are susceptible to goodies in the gubernatorial toolbox -- appointments and the like. ...

At any rate, most voters probably think of a different Mel when they think of tax restrictions. It was Mel Hancock, the former congressman, who pushed through the Hancock Amendment in 1980, which limited state revenue growth. In 1994, he pushed Hancock II, which opponents said would force the state to make massive budget cuts.

Carnahan led the opposition to Hancock II, joined by officials throughout state government. ... Voters rejected Hancock II by a wide margin.

But soon after the vote, Carnahan -- recognizing anti-tax sentiment -- unveiled "Farmahan I" and forever altered the policy environment in the Missouri Capitol.

One man who worked closely with Carnahan during that era was Roy Temple, who now haunts the Capitol as a Democratic consultant. Asked about the amendment in light of the current budget constraints, Temple said it's easy now to see how "terribly complicated" the state budget process is.

"It's clearly a significant constraint at this point that anything you do that really addresses the structural budget issues probably requires a vote of the people," he added.

Josh Flory covers politics and the Missouri Legislature for the Columbia Daily Tribune.