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Lobbyist Money Help  

Committee defeats refund reserve fund

April 01, 2003
By: Valerie C. Green
State Capital Bureau
Links: SJR 14

JEFFERSON CITY - A measure that would send tax refunds into a reserve fund instead of back to the taxpayers was defeated in a Senate committee Tuesday.

Sen. Ken Jacob, D-Columbia, sponsored the constitutional amendment that would put excess taxes the state collects over its revenue lid set by the Hancock amendment into a revenue stabalization fund.

"The purpose of this fund is to recognize the ups and downs of the economy," Jacob said. "It forces excess money to go into the fund so that when the economy is down, the revenue is still there to stabilize services."

Since 1980 the Hancock amendment has required the state to give refunds to taxpayers who pay more than a certain limit based on thier income. Jacob said if the state raises more money than that cap, it should keep it in a separate bank account for years that revenue doesn't reach that lid.

Sen. John Griesheimer, R-Washington, said he wasn't sure how he would vote on the measure until right before he voted. He said he had mixed feelings about keeping all of the money for the state.

"The refunds are the people's money and the are entitled to get it back when they've overpaid," Griesheimer said. "But, it is ridiculous to send back $2 or $3 refund checks when it costs us more to mail the refunds."

Griesheimer voted against the bill and suggested a threshold on the refunds. If the refunded amount would be below a certain dollar figure, Griesheimer would prefer the state keep it. But if the refund is a larger amount, he would send it back to the taxpayers.

"If there is a significant refund, the people should get it back, but if it is only a small amount maybe we shouldn't send all of it back," he said.

The state refunded about $900 million during the prosperous 1990s but now is faced with a projected $1 billion shortfall for next fiscal year.

"This is a crazy way of doing business," said Sen. Joan Bray, D-St. Louis County, "I don't disagree with government reigns on spending and maybe even on revenue, but Hancock is too restricting. Sen. Jacob's proposal might be a solution."

Opponents to the idea said that this was an attempt to get around the Hancock limits and to increase state spending.

"I understand the idea that it would help in bad budget times, but I am suspect that in the healthy times we aren't giving money back to the people," said Sen. Carl Vogel, R-Jefferson City.

Vogel, who chairs the Senate Ways and Means committee which heard the measure, said he was willing to give Jacob a hearing but that he does not support the idea.

"This would be an excuse to increase the budget disproptionately, becuase it is an incentive to spend more than we should," he said.

Jacob introduced a similar bill last year and it didn't come out of committee. He said he didn't expect there to be enough votes to pass it out of committee this year either.

"This is more of a conceptual bill that I use to put the idea out there and let it percolate for a few years," Jacob said. "With the current make up of the legislature, I don't think the political will is there to yet fix the problem."