Less spending - yes; higher taxes - no

Gov. Bob Holden chose the week of the Missouri legislature's annual veto session earlier this month for a 90-minute meeting he called a "budget summit." As with the governor's recent appearance before the Missouri Highways and Transportation Commission -- widely viewed as an exercise in buck-passing -- the result was somewhat less than satisfying.

With his top administrative officials and some lawmakers present, Holden called for an end to some corporate tax breaks and warned state agencies to brace for another round of budget cuts and withholding in next year's budget.

Exactly what "corporate loopholes" Holden is talking about will need to be carefully scrutinized by lawmakers when they convene in January. Too often, when a politician begins talking about closing tax "loopholes," it's a code word for tax increases. And tax increases we don't need, thanks to a shaky economy struggling to recover from the downturn of 2001.

The situation in Missouri, as in other states, is worrisome: General revenue is coming in about $70 million below projections during the first two months of the fiscal year that began July 1. For the next budget cycle, the state would have to come up with an estimated $435 million in additional revenue just to keep pace with the current $18.9 billion budget, according to state budget director Linda Luebbering.

Holden is correct to warn his department heads to be preparing for a no-growth budget next year, and the possibility of further cuts. What Missourians are looking for is hard evidence that many of the long-delayed, difficult choices are being made.

Decisions that have led to runaway spending were made throughout the robust economic decade of the 1990s by this state and all the others now contemplating tax increases. In the end, two options will need careful review to meet future fiscal challenges:

Even deeper cuts in state spending, which will entail removing much of the bloat of excessive state budgets that have taken advantage of skyrocketing revenue.

And tax cuts -- not increases -- to further stimulate the kinds of economic activity that will benefit Missourians through more jobs.