State in a spending crisis, not a revenue disaster

Tuesday, April 16, 2002

The Missouri legislature is fast approaching its deadline for producing a balanced budget for the state's fiscal year that begins July 1. During years of rapidly growing revenue, state spending kept pace. Keep in mind that much of the state's budget - projected to be $19 billion next year - includes pass-through federal dollars and federally mandated programs.

Also keep in mind that the budget being worked on by House and Senate negotiators is still in the red. The governor is constitutionally prohibited from signing an unbalanced budget, so lawmakers must make some crucial decisions or dump the mess into Gov. Bob Holden's lap.

And keep in mind that the needed trimming comes on top of $600 million that already has been withheld from various state agencies' spending plans, and on top of using all of the state's tobacco settlement to shore up spending, and on top of new forms of gambling to generate more dollars to spend.

The only things left untouched - so far - are taxes and the state's Rainy Day Fund.

When Dan Mehan, president of the Missouri Chamber of Commerce, spoke at a recent First Friday Coffee held by the Cape Girardeau Chamber of Commerce, he put it plainly. The state doesn't have an economic disaster or emergency. It has a spending crisis.

The state chamber is among the many groups keeping an eye on anticipated revenue for the coming fiscal year. Others involved in the revenue watch are budget writers in the legislature and their staff analysts, along with the governor's office and its stable of experts.

Interestingly, revenue forecasts from these various groups don't exactly match.

The governor has maintained since late last year, when his staff was putting together a budget recommendation to send to the legislature, that last year's so-called national recession would hurt the flow of money into Missouri's treasury. There are several ways to interpret that forecast:

1. There will be less money next year.

2. There will be the same amount of money, but spending needs are higher.

3. There will be more money than last year, but it still won't be enough to pay for everything everybody wants for every program that is needed or has been added or has been enhanced during the years when revenue was rising so rapidly.

A look at almost anyone's set of figures shows something interesting: State revenue didn't even blip during last year's recession. Nor did it show any signs of being affected by the terrorist attacks in September. Revenue for the first nine months of the current fiscal year is up. And projections for the last quarter, ending June 30, shows the year will end well ahead of the previous fiscal year.

So the cuts currently confronting the budgetmakers are cuts in bloated spending. They are not the result of a disaster in state revenue. This seems to be a hard lesson for some folks in Jefferson City to learn.