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Cold Budget Reception

January 21, 2003
By: Valerie C. Green
State Capital Bureau

JEFFERSON CITY - State budget director Linda Luebbering faced resistance from members of both parties in her first public presentation of the governor's budget plan to state lawmakers.

Luebbering presented a plan to the Senate Appropriations Committee to make up for this year's $291 million projected shortfall by borrowing from tobacco settlement funds to give the state $372 million for capital improvement projects.

The loan would cost $958 million in total debt service over 40 years.

Members voiced concerns about borrowing from the future to make up this year's shortfall.

"If we borrow money at a high interest to get it now, we are forgoing future money," Sen. Norma Champion, R-Springfield, said. "I don't see how it saves money in the short term."

Jim Carder, Division of Accounting director, said that this would not be an uncommon use of debt. "It is not cost effective to wait," he said.

Luebbering also faced challenges to the governor's proposal to make up for a $1 billion shortfall in next year's budget.

Holden has proposed a 55 cent tax on cigarettes to raise about $278 million, which would likely need to be passed by the voters.

Sen. Chuck Gross, R-St. Charles, questioned whether the governor's budget plan was actually balanced since it would depend on tax increases that Missourians would not consider until a special election in July -- after the budget bills would have been passed by the legislature and signed by the governor.

"We need to budget on money we expect to have, not money we hope we might have in the future," Gross said.

Gross argued that the constitution requires that the legislature pass a balanced budget by the beginning of the fiscal year, but Luebbering stated that there only needs to be a plan for a balanced budget.

"We can plan on the assumption that the voters will approve the taxes," Luebbering said. "If they don't, the governor will have to bring the budget back into balance through withholdings."

A member of the governor's own party questioned another plank in the budget -- providing an early retirement plan for state workers.

Luebbering said this would save $4 million, but the Democrat's senior member on the committee voiced concerns that it would cost more in health care and benefits in the future.

"It costs more in the long run in money and lost experience," said Sen. Wayne Goode, D-St. Louis County. "You lose the people you don't want to lose because they can find jobs somewhere else and take the state retirement with them."

Luebbering is scheduled to present this plan to the House Budget Committee this morning.