Missouri budget - the rest of the story

Tobacco bonds should be a talking point, not a campaign issue

GOV. BOB HOLDEN'S visit here last week, one of eight or nine visits around the state, was geared for media coverage.

The appeals to college administrators and elementary and secondary school officials to lobby their state representatives and senators to support his call for the use (pre-spending of future anticipated -- but not guaranteed -- revenue) of tobacco money failed full disclosure. Or, as PAUL HARVEY would say ... and now, the rest of the story.

1. The Missouri House and Senate had already overwhelmingly voted for the use of tobacco securitization money for the fiscal year, which ends June 30. Even realizing legitimate arguments against securitization, every Southeast Missouri representative and senator but the one from Butler County voted yes, and Holden signed this year's budget into law.

2. However, the bonds have not been sold because of legitimate questions about the state's bond ratings and the costs which were eating up more than 70 percent of each anticipated long-range dollar.

3. Then a new bonding package was put together which, some say, shifts the burden of default from the bondholders to the taxpayers of Missouri.

So this is not new money. It's the same money previously passed in this fiscal year's budget but repackaged (probably for the better).

Who says the House and Senate won't support this stopgap measure to find revenue to fund the state budget shortfall? My recommendation to the governor is to meet with the leaders of the Legislature and address this issue ... something that doesn't require trips around the state.

I hope the governor, the House and the Senate will not move into campaign mode but instead will address the serious budget issues of Missouri.

Key components of the governor's budget plan require successful votes

During the last four years, general revenue in Missouri has DECLINED a total of $113 million while the state's spending has greatly exceeded this amount, forcing the use of savings, one-time funds and projected revenue.

The continued runaway costs are not seriously being addressed. Gov. Holden's budget for the fiscal year that starts July 1 addresses the $1 BILLION shortage by advocating TAX or FEE INCREASES of more than $700 million and spending reductions of $280 million (including early retirements and layoffs).

AND ... of the $700 million, about $500 million requires a VOTE of Missouri residents -- a vote which will not occur until after the Legislature has passed a budget and adjourned.

Is such an "only if" budget really one in balance? One that meets Missouri's constitutional requirement? For example, $278 million of new revenue is anticipated from a 55-cent-per-pack tax increase on cigarettes (recently defeated and a probable loser of the financial promotion support of those health entities who financed the first campaign since the funds are now to be earmarked for education, not health care).

And $193 million of new GAMBLING money is included in the governor's proposed budget by:

1. A 2 percentage-point increase on gaming receipts to 22 percent from 20 percent, which is projected to raise $30 million ... but I think requires a VOTE of Missouri residents.

2. A 100 percent increase in admission fees to $4 from $2, which is projected to raise $106 million (paid by the gambling casinos) and would also require a yes vote of Missouri residents.

3. Eliminating the loss limits of riverboat gaming, which would raise $56.7 million. This would not require a public vote but is opposed by many, including St. Louis labor union leaders who will only tie their support to the proposal if they are permitted to UNIONIZE the gaming employees.

In a time that MISSOURI has led the nation in the loss of jobs (over 90,000 last year) the remaining $187 million of new revenue in the proposal is to be achieved by closing tax loopholes for some businesses. The Legislature will review these proposals as all expenses and losses of legitimate revenue deserve regular scrutiny.

Jim Moody's forthcoming budget analysis will offer possible solutions.

A new JIM MOODY financial analysis of Missouri's budget is due out shortly and will address the causes and possible solutions to the budget problems in Missouri.

We helped distribute, as did Gov. Holden, the first report, and the issues demand serious remedies and also serious media reporting so the public will not be susceptible to clichés and political rhetoric.

The budget problem requires reasoned action and study by the governor, the Legislature and those departments that make up the components of the budget. We owe them our efforts to inform ourselves.

"The one central thing that is clear is that the problems that we have allowed to develop over the last decade will not be solved without very difficult and painful decisions. What we need most is a sense of priority that serves as the road map for future decisions," said Moody.

Words of wisdom: When you get to a fork in the road, take it

Yogi Berra also said:

Always go to other peoples' funerals, or they won't go to yours.

I'd give my right arm to be ambidextrous.

That restaurant's so busy nobody goes there anymore.

If you don't know where you're going, when you get there, you'll be lost.

Baseball is 90 percent mental. The other half is physical.

If people don't want to come out to the game, nobody's going to stop them.

Gary Rust is the chairman of Rust Communications.