The Holden budget- Higher taxes, lots more gambling

As with Gov. Bob Holden, we in the General Assembly face a constitutional mandate to balance the state budget. The budget process starts with the governor's proposal, unveiled this past week, for fiscal year 2003, which begins July 1. Holden says his budget is "balanced," that he "made the tough choices."

You will agree with him, if you buy into the way he did it. Here's how.

Taking $135 million out of the state's Rainy Day Fund.

This requires a two-thirds vote of both the House and Senate. Unlikely. Most unlikely. The only previous time we've dipped into the Rainy Day Fund was after the Great Flood of 1993. What happens if something like this hits us later this year? Further, there is a clear constitutional question as to whether this can even be done according to the governor's plan.

A massive expansion of the gambling industry in our state.

In the same week that the governor proposed adding the game of keno -- don't ask me what it is -- to every retail establishment and restaurant in Missouri, the Holden-Carnahan-appointed Gaming Commission voted to add keno to its gambling mix. This, we are told by the governor and others who've cast their lot with this industry, will generate approximately $20 million in additional revenue. Moreover, removing the $500 loss limit for each visit to the existing casinos and adding another dollar to the boarding fee for getting on one of the boats are also in the governor's budget. We are told that the loss limit alone would generate an additional $100 million-plus. Both of these will require the assent of us lawmakers, which means the governor's "balanced" budget yet again assumes highly controversial legislative action whose actual occurrence is, for a host of reasons, unlikely.

Socking it to the retailers of Missouri.

Holden's proposal is to reduce the retail 2 percent sales tax allowance for the collection and timely remittance of the state sales tax to 0.5 percent. It is said this will generate approximately $36 million for the state. Stunned representatives of the retail sector informed me, as I was preparing to leave the Capitol Thursday, that they were being forced onto a "war footing" to fight the proposal. The most recent study by retailers says their cost of collection is 2.93 percent, or $2.93 for every $100 a retailer collects for the state. This tax, of course, applies to the hotel and restaurant industries, as well. Yet again, this proposed tax increase will require legislative action. Most unlikely.

Even with all this, though, for the second year in a row, there will be no cost-of-living increase for state employees. So the folks who are facing the new, Holden-union lug of $20 per month on their paychecks aren't even getting the cash to pay it.

Last year, the governor told us transportation was in "crisis" and we must pass the largest tax hike in state history to fund it. The Senate, which as a result of special elections was in Republican hands for the first time since the 1940s, declined to claim paternity of this baby, and it died as time ran out in May. This year, no mention of transportation anywhere in the governor's address. Not to worry, though: The Democratic leadership of the House of Representatives has outdone itself, after pushing the governor's proposal last year, in proposing an even larger, $800 million plan, this past week.

Take that, taxpayers! Take that, retailers, restaurants and hotels! Aside from the taxes, the premise evidently is that we can gamble our way to prosperity. I'm not betting on it.

Peter Kinder is assistant to the chairman of Rust Communications and president pro tem of the Missouri Senate.