STATE GOBBLES UP REVENUE GROWTH AND COST SAVINGS

In response to the popular notion that criminals should be punished by serving longer sentences, Gov. Carnahan said in his State of the State message Wednesday that he wants to spend $272 million on more prisons. At the same time, the governor wants to spend more on public schools and $59 million on construction projects at the state's colleges and universities. That is the good news in what most observers are calling a conservative blueprint for the state's next fiscal year.

Overall, the proposed $12.8 billion state budget -- up about 4 percent from the current budget -- is growing faster than the rate of inflation. Budget Director Mark Ward attributes the growth in state revenue to several factors: increased federal funding, a strong economy that has fostered business growth and new jobs, gambling revenue and voter-approved special taxes. In addition, Carnahan and his closest advisers are proud -- and they should be -- that there are fewer state employees in the proposed budget than there are currently, which means some divisions of government are streamlining their operations.

One little-talked-about incentive program for state departments and divisions has been an effort to reduce the bureaucratic costs of government, including cuts in employees and other operating costs. Typically, state officials are reluctant to spend less than they are appropriated, because of the fear that their budgets will be cut in following years. The carrot to cut back is a promise to return unused fund to programs, not operations, which means more money is available for direct services and projects. This idea has worked over the past two years. State government is working more efficiently. However, the overall costs keep going up, because ways are found to spend the savings.

An example is funding for a new state prison. Just last year voters were being asked to pass a statewide bond issue for construction projects, including prisons, because the state didn't have the cash on hand. Now, because of savings from cutbacks and better-than-expected revenue from many sources, there is enough money to build a prison that wasn't included in the approved bond issue. This is a one-time expense, of course, and unless there are considerably more reductions in the cost of government, the money won't be there again.

Building more prisons may be popular right now. The long-term effect, however, is in the cost of feeding, clothing and providing medical care for more and more prisoners. These are costs that are becoming increasingly significant as the state's prison population grows, even though Missouri has the lowest per-prisoner cost in the nation -- about $25 a day.

It is clear that the aims of the Carnahan administration are twofold: On the one hand, efforts to reduce the cost of bureaucracy are working, and, on the other hand, ways are being found to spend every dime of the savings. Some beneficiaries of this largesse will welcome the extra funding and the special projects that are the result of streamlining and efficiency. Others, though, will well wonder why taxpayers aren't among the direct beneficiaries of the expansion in state revenue from sources others than taxes. Even though the governor is proposing two tax breaks -- one for Missourians who care for elderly relatives in their homes and another for the self-employed who provide their own health insurance -- the savings don't come close to the additional spending.

The future of Missouri is bright: Most Missourians are employed, the economy is expanding and state revenue is exceeding expectations. Sounds like a good time to remember taxpayers and give them a break. It may even be time to consider some serious tax cuts that will benefits all of the state's taxpayers.