DEMOCRATS PUSH PENSION RAISE TO PASSAGE

With only seven votes to spare in the House, the General Assembly approved a pension-increase bill that may return to haunt lawmakers when they face voters later this year. Attached as an amendment to a broad retirement measure for thousands of state employees, the legislative pension hike not only increases payments but greatly reduces the number of years members must serve before qualifying for top rates.

Currently, legislators must serve 20 years before becoming eligible for the top pension bracket, but under the new bill awaiting Gov. Carnahan's signature, members of the General Assembly can qualify after serving only three terms in the House and one and a half terms in the Senate. The measure allows lawmaker with 6 years of service to qualify for a $5,400 a year retirement check, an increase from the current $2,800 pension payment.

Rep. Gracia Backer, D-New Bloomfield, chairman of the Appropriations Committee for general administration, sponsored the bill and defended the conference report when it was on the floor. She noted that term limits would presently prevent newer-elected lawmakers from ever drawing the top retirement payments, and that in the long run, the state would save money because of reduced pensions for members who may now serve only four terms in the House and two in the Senate.

Some 13,000 former state employees are affected by the retirement increases, but this number does not include public school teachers, University of Missouri personnel and employees of the Highway and Transportation Department, all of which have their own plans. The new measure allows retiring employees to begin receiving benefits at age 50 and dictates mandatory retirement at age 80. The bill increases the retirement-pay factor from 1.5 to 1.6 percent for employees, although a much higher factor will be applied to lawmakers if the governor signs the measure, which he's expected to do.

Although legislators disposed of the Backer bill in a short time, they're certain to encounter it again when this year's campaigns roll around. The vote approving the increase was largely along party lines, with Republicans generally opposing it, while enough Democrats were finally mustered to approve it. One of the points expected to be used in the campaign will be the speedy pension-hike enactment while action was still pending on such measures as health-care and welfare reforms and tougher crime laws.

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BAILEY BLAST: Although she received criticism for her late-notice criticism on the performance of former Attorney General Bill Webster, State Auditor Margaret Kelly has taken a sharpshooter's aim in her exit audits at ex-State Treasurer Wendell Bailey. Now facing a federal grand jury in Springfield, the Willow Springs Republican has drawn fire from Kelly's auditors in at least four areas of the treasurer's office: the MO Bucks program, a system for keeping track of pledged state securities, computer access controls, and the lottery collection account.

One of the auditor's most serious complaints was Bailey's management of the MO Bucks loan plan. To quote the exit audit report: "The State Treasurer's office has not taken appropriate steps to ensure that borrowers under the MO Bucks for More Jobs program comply with state laws applicable to that program." Quoting a former coordinator of the plan, the audit states: "Compliance is reviewed only if the company requests another loan through the More Jobs program." In fiscal 1992, 46 percent of the companies in MO Bucks did not reapply and were not tested for job creation compliance, while of 7 companies audited, two did not even meet the required number of created jobs. One firm created only 21 of the 250 jobs promised, while another company which received a $75,000 loan managed to create only three jobs.

Other complaints on Bailey's performance in office ranged from inaccurate listings by numerous banks receiving state deposits to 24-hour-a-day computer systems that had no access safeguards and could be entered by anyone. Auditors also reported a discrepancy in the treasurer's Lottery Account, amounting to several thousand dollars.

Bailey has refused to respond to Kelly's charges, and the audit includes this closing statement: "Mr. Bailey indicated he did not have access to any of the official records of the Treasurer's office, and was not in a position to provide written responses to the audit report."

Records on Bailey's tenure in the state office have been requested by the grand jury, and incumbent Treasurer Bob Holden said the documents asked for by the jury have been sent to Springfield.

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TAX TACKLE: Before it ends, this session should see at least one state tax biting the dust, which is an unusual event of some significance in this era of ever-increasing numbers of taxes. A measure which would provide an annual $2,000 exemption on sales taxes on out-of-state purchases has already passed the Senate and should receive House attention soon.

Introduced by Sen. Wayne Goode, D-St. Louis, the proposed tax exemption on these catalog sales came in response to a public outcry when taxpayers received a form in January from the Missouri Department of Revenue that asked for any uncollected sales taxes on out-of-state purchases.

Although the law had been on the books since the Ashcroft administration, no effort had been made to collect taxes on these purchases until after the U.S. Supreme Court refused to hear an appeal that had been filed by a business lobbying organization in the state. Sharing with the state in this expected revenue bonanza were cities that also levy municipal sales taxes, although the state had recommended that these funds be placed in a separate bank account and not spent until the legality of the law was decided by the appellate court.

Because of the complexity in determining the amount due the state and cities, which have varying rates, it was felt the legislature should permit an exemption despite the decrease in tax revenue. Will citizens know how to act when they realize at least a partial tax reduction has been voted?