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Lobbyist Money Help  

House passes Republican plan to use tobacco money

February 13, 2003
By: Valerie C. Green
State Capital Bureau

JEFFERSON CITY - In an effort to compromise on how to handle the state's budget shortfall, House Republicans Thursday agreed to let Gov. Bob Holden borrow an additional $50 million beyond what they had approveed the day before.

But Holden said he will ask for even more.

The House gave initial approval to use $100 million in tobacco money on Wednesday, but an agreement reached in a late-night meeting between House leaders and the governor's chief of staff upped the amount Republicans were willing to give.

"When we agreed that the House would approve $150 million in tobacco securitization, I left the option open to ask for more in the Senate," Holden said.

The governor has threatened to cut from education to make up the projected $350 million shortfall if the legislature didn't pass the bond issue he requested. Holden said he will call on school superitendents and educators over the weekend to encourage their Senators to borrow more money.

"The House today endorsed $82 million in cuts to education by passing this bill," Holden said. "It's now up to the Senate to protect education."

Jim Snider, chief lobbyist for the UM system, said about $10 million would probably be cut from the schools, which be distributed proportionately.

"The university regonizes the fiscal situation of the state, and we are pleased with the compromise that minimizes the effect on education," Snider said.

House Budget Chairman Carl Bearden, R-St. Charles, said the governor agreed to a $150 million bond issue, but did not make a commitment on where the other cuts would come from.

"We can't force him to make any cuts," Bearden said. "If he doesn't take our suggestions, that's his decision."

Legislators and the governor's staff have been using the term tobacco securitization to describe the plan.

Originally, the proposal would have had the state seeking a cash advance from private investors on revenues the state expects from the national tobacco settlement during the next few decades.

But because the risk to private investors made sale of those bonds unlikely, the administration has proposed backing the bonds with the promise of state appropriations if tobacco settlement money is not available to pay off the bonds.

Some who supported the bill said they had concerns about not cashing in enough tobacco money to prevent the education cuts.

"I feel like I'm in a hostage situation for our children instead of an education situation," said Rep. Wes Shoemyer, D-Clarence. "My yes vote has been held hostage to this compromise."

Last week, Republican leaders suggested cuts in other areas to protect education. The governor has agreed to three of their five proposals.

Holden said he will hold up funds for a UMKC pharmacy building, delay a lawsuit settlement payment to Southwestern Bell and cut $87 million from state department expenses.

Almost half of House Democrats voted against the bill because they said they wanted to borrow more to protect education.

"They (Republicans) gave enough just to look like they are compromising politically," said Rep. Chuck Graham, Columbia, who voted against the bill. "They have not given us enough to stop the cuts from education."

Minority floor leader Rep. Mark Abel, Jefferson County, disagreed with the term compromise saying that it was more of an ultimatum.

"The governor was given this plan or nothing," Abel said. "No one in this chamber can go home this weekend and tell their constituents that they've saved cuts from education."

All but one of the Republicans voted for the bill, even though some said they had concerns with the plan. Rep. Chuck Purgason, R-Caufield, said he had problems with it, but said it was a way to give schools 80 percent funding instead of nothing.

"We have reached a compromise with a man who said he wouldn't compromise," Purgason said. "The governor put a kid over the rail and threatened to drop him. We are giving back eight out of 10 dollars the governor wanted to take away."

Local legislators were split on the issue.

Rep. Jeff Harris, D-Columbia, voted for the plan because he saw it as the "least awful of options."

"I was concerned that if we didn't pass this version, severe cuts would be made to higher education," Harris said. "This is better than using none of the tobacco money."

Reps. Vicky Riback Wilson and Chuck Graham, both Columbia Democats, voted against the bill because they said it did not go far enough to prevent education cuts.

"We are pretending that we've done something good, but we haven't," Wilson said. "Instead, we've kicked them in the teeth again."