Many American workers have already received their first paychecks that reflect new withholding rates based on the latest round of federal tax cuts approved by Congress and quickly signed into law by President Bush. The result is more take-home pay, which comes at a time when families are trying to make ends meet and when the national economy needs a boost from consumer spending.
Just like most families, all 50 states are struggling to make ends meet too. And most states are looking at increases in taxes and fees to match up revenue needs with spending plans. As a matter of fact, residents in some states will wind up paying more in new state taxes and fees that they get back from the federal tax cut.
Even with the $20 billion Congress is sending to the states to help with budget crunches, most states say they are still short of the revenue needed to pay for state services and programs, even after whacking budgets at the state level.
The question is: Have they whacked enough?
That's the question in Missouri, where a special session of the state legislature has just ended its second week of deliberations and appears to be no closer to resolving budget issues than it was when the regular session ended in May. The Republican-controlled legislature made it clear from the outset in January that it was in no mood to raise taxes -- at least not in any substantial way -- to pay for the spending levels sought by Gov. Bob Holden.
But the governor holds the veto pen, and when the legislature sent the budget bills to Holden, he used it to veto about two-thirds of the proposed $19 billion budget. The governor then called the legislators back into session, urging them to raise taxes and approve more spending.
The governor's strategy is based on hopes that hundreds or thousands of Missourians who are affected in one way or another by state spending -- mostly through education or social services -- will raise a howl so loud that legislators will be cowed into going along with the governor's plan.
But that hasn't happened. Sure, the special-interest lobbyists who populate the Capitol halls throughout the regular session have been pressuring legislators for more goodies. And there was an unruly rally last week as the governor's supporters and those opposing tax increases whooped and hollered for the news media. And there are the telemarketing push polls aimed at getting real Missourians to voice their concerns directly to legislators and newsrooms across the state -- with little impact at all.
The bottom line is this: Ask most Missourians if they want spending cut for their child's education, and they will say no. But ask them if they want their taxes to go up, and they'll also say no. As a result, there simply is no clamor from a broad base of Missourians to do what the governor wants to do. And Republicans and a good many Democrats in the Missouri House and Senate know that. They've known it all along. And they don't intend to fall for the governor's tactics.
Let's get this over with. If the governor and legislative leadership can't work out a compromise, then let's send the legislators home. Let's set aside the nearly $400 million coming from the federal government to cover any shortfalls in revenue for the coming fiscal year -- and save anything left over to help address the budget for the following year.
It's time to stop playing games with the state budget.
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