In addition to Rainy Day Fund raid, Holden eyes new taxes

This is written on the Ides of March, looking toward the balance of the legislative session that ends May 17.

We return next week for business through Thursday afternoon before adjourning for a week's spring break that, this year, happens to be during Holy Week.

Returning April 2, lawmakers will face the final seven weeks with a deadline for completing the budget a week before adjournment, on or about May 10.

Two months ago, Gov. Bob Holden proposed his fiscal 2003 state budget. In that document, he proposed accessing the state's Rainy Day Fund to the tune of $135 million to shore up budgetary shortfalls. Last week, he declared that the state was in a "fiscal emergency," preparing us for using the Rainy Day Fund.

Problems loom.

First, using the fund requires a two-thirds vote of both the House and Senate. This is exceedingly unlikely in either the House, still under Democratic control, or in the Republican-controlled Senate.

There are at least two Democrats on the House Budget Committee -- one from Jackson County, another from the Bootheel -- who won't vote with the governor on this issue. House Budget Committee chairman Tim Green, D-St. Louis, is ready to move a bill accessing the Rainy Day funding if he has the votes. Apparently, he doesn't.

Second, Rainy Day spending only postpones the day of reckoning. Any funds used are required to be paid back in the succeeding three years, with interest. To pay for current spending, then, under Holden's plan we would be ponying up cash from a fund that would require $45 million in payback next year and for the next two years after that. Rainy-day funding this year appears to be a non-starter.

The governor is backing untold hundreds of millions in higher taxes. For the gambling industry, already one of the most heavily taxed, there's a 2 percent increase in taxes on riverboat gaming receipts plus a $1 increase in boarding fees.

Last week, in the same edition of the St. Louis Post-Dispatch, readers learned in separate stories of two other taxes Holden is proposing to raise.

There's a brand-new tax of 0.02 percent on your utility bills to fund the Office of Public Counsel over at the Public Service Commission.

Then there's a 50-cents-per-pack increase on the tobacco tax, pushed by the hospitals.

Several other states have already passed similar measures. It is alleged the higher tobacco taxes will raise something like $320 million for health care.

It appears an initiative petition campaign will take this straight to the ballot for voter approval.

Last year, the governor got into a tizzy because the Senate didn't join the House in passing his transportation tax increase, which at $747 million would have been the largest in state history.

This year, the speaker of the House stepped out in proposing $800 million in higher taxes for transportation and schools, later reduced to $600 million.

In the Senate -- the one body over which this writer has some direct responsibility -- we're cutting a bloated budget by 10 percent across the board and looking for more savings. To his credit, the speaker followed suit, announcing he would do the same in the House. We'll be watching for the follow-through.

Meanwhile, it's clear the governor dumped all the hard choices on the legislature. It'll be a tough 60 days.

Peter Kinder is assistant to the chairman of Rust Communication and president pro tem of the Missouri Senate.