Some suggestions for resolving Missouri's budget situation

I don't pretend to have all of the information I'd like to have to comment on the Missouri budget situation, but I have enough to make some suggestions and to raise some questions.

I also have experienced serving six years in the Missouri House of Representatives with time on the state reorganization conference committee during the era of Gov. Kit Bond.

Other committees on which I served involved the rewriting of the school foundation formula in the mid-1970s and the conference committee (five House members and five Senate members) on the appropriations and budget committee.

Most recently (and noticeably lacking in a number of the major political participants most directly involved in efforts to shape this years budget, including most opinion commentators in the news media) I have been the president of multiple corporations which employ more than 600 people in a multimillion-dollar business and have been faced annually with budget and financial decisions during good and poor economic times.

Not to rehash how we got to the current dilemma, let me address what's apparently on the table.

1. Gov. Bob Holden's balanced-budget proposal is dependent upon Missouri taxpayers voting an approximate $200 million tax increase on cigarette purchases (which they might do) but only after the legislative session is over, unless a two-thirds vote of both houses for an emergency clause can be secured. This is very unlikely, in my opinion.

Additional revenue can possibly be obtained by massaging gambling boat tax revenue and removal of loss limits and addressing some alleged business loopholes.

Great. At a time Missouri leads the nation in a loss of jobs, we look to this to increase our revenue (possibly justified) and to relying upon people to continue or increase their gambling and smoking to balance the budget. Hallelujah!

2. New projections indicate the possibility that Missouri might fall an additional $150 million to $200 million short of current revenue projections for next year's budget, which emphasizes the need to reduce accelerated expenditures.

3. House Republicans have passed lump-sum budget allocations (with some adjustments for health, prison and welfare changes) to the different state departments.

This permitted the appropriations process to move to the Senate in a timely manner while letting the House committees to continue to review department breakouts for probable conference committee negotiations later.

4. The Senate appropriations chairman has indicated the committee may follow the more historic line-item appropriation procedure much to the applause of editorial boards and the governor who seem to be stuck in the "we've always done it that way" thought process.

5. Observation: No matter whether you lump sum or line item, you will still have to deal with a lump-sum appropriation to each department.

The question is how far down do you go "from the outside" on telling department heads how to spend their money?

I have no problem with line items to smaller lump sums. But find me any business or government department head who would prefer to be told (if they get the same amount of money either way) how the money should be spent to provide the best services and employer support. Sure, they have more burden, but they also have the responsibility for results. (Does the administration suggest the department heads may not be responsible?)

Most businesses break out items for review, but department heads prepare the allocation and expenses within the revenue and guidelines provided.

Frankly, I don't think the governor, the House and the Senate are that far apart in the reality of the situation and the steps needed to be taken to adopt this coming fiscal year's budget.

Fiscal responsibility dictates they work together, ignore much of the public clamor against the necessary forthcoming cuts and do what they think is best.

The war in Iraq and threatened terrorism should bring solemn reminders to those politicians who might be tempted to put campaign, party and politics ahead of good government. We expect our elected government officials to be responsible in addressing the Missouri budget, which is not the most important issue they or this country face.

P.S. Missouri has been balancing its budget for years with the sale of bonds (more than $4 billion issues with more than $2 billion of principal still owed at the start of the current fiscal year) -- which I'm not opposed to -- and more recently the pre-selling of tobacco-settlement revenue.

Gary Rust is the chairman of Rust Communications.

[ Click here for larger version of the graph ]