REFUNDS, TAX CUTS SHOULD BE GOOD STATE NEWS

A budget crunch lies ahead for state government, at least if you talk to two veteran Missouri lawmakers who chair the budget committees of their respective chambers. State Sen. Wayne Goode, D-St. Louis and state Rep. Dick Franklin, D-Kansas City, sent a letter recently to members of their two committees. Goode chairs the Senate Appropriations Committee, while Franklin chairs the House Budget Committee.

In a letter last month, the two warned that growth in the state's general revenue during the current fiscal year will be significantly less than previously forecast. According to projections agreed upon by the two committee staffs, revenue will increase just 2 percent, or about $120 million, during fiscal year 2000, which ends June 1. When forecasting a year ago, the prediction was for 5.1 percent revenue growth. The revision, say these gentlemen, reflects tax cuts and tax credits enacted last year.

Missouri's tax limitation amendment, known as the Hancock Amendment, may be credited with bringing this about.

Because the state has been taxing more than the growth in personal income the last five years, the state has been forced under that provision to refund $875 million and to cut taxes by a total of $770 million to stay under the Hancock lid. These back-to-back tax cuts, meager though each may have been, combined with tax credits enacted by lawmakers, do have a cumulative effect on state revenue. Incidentally, among these credits is the historic-preservation tax credit, now helping to revitalize older neighborhoods.

The cuts are bringing those revenue totals into balance, resulting in some discipline on lawmakers to nudge them toward a revolutionary concept: economy in government.