STATE SPENDING

Businessmen in Missouri are beginning to notice a slowdown in the state's economy. As businesses react to economic conditions, employees feel the pinch reflected in meager pay raises or none at all. In some cases there are layoffs.

But don't expect to gauge the condition of the economy by looking at the state's budget. Gov. Mel Carnahan's budget proposal for fiscal year 1997 calls for spending more than $2,700 for every resident of the state. That is an increase of more than $550 in per-capita spending in just the past two years. And for every $10 proposed to spend in the next fiscal year, $6 would go for social-services programs that include Medicaid, Aid to Dependent Children and general welfare.

That leaves 40 percent of the budget for the state's remaining 13 departments and government activities. The state's Department of Social Services would get a 22 percent funding increase if the governor's budget is adopted. That department, with help from the federal government, dispenses more funds -- $3.9 billion budgeted in 1997 -- than any other department. Education would get a 16 percent funding increase over the fiscal year 1995 figures.

While Missouri businesses eye meager budget increases that mirror inflation, state government would enjoy prodigious growth under the governor's plan. Only a single agency, the Department of Insurance, would receive less, with proposed budget allocations lower than it received in fiscal 1995. Meanwhile, the governor wants a whopping 5.8 percent increase in pay for state employees, well above the business-world average that tends to mirror inflation.

The governor's budget increases are matched only by the rapid rise of income and corporate taxes -- the fuel for all this intended government spending growth. Instead of offering real tax relief to Missouri taxpayers, the governor wants to continue collecting the income tax and corporate tax revenue while proposing a slight cut in the state's sales tax, plus tax refunds mandated by the revenue-limiting Hancock Amendment. This while states across the nation are cutting taxes to spur economic activity.

Carnahan wants to play two roles: That of dispenser of government goodies to various state agencies and their constituents, and champion of tax relief.

Missouri taxpayers need to look at the numbers in his budget plan and see that it is heavy on government largesse and weak on tax relief.