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House budget chairman calls on Holden to release some of withholdings

October 06, 2003
By: Thomas Warren
State Capital Bureau

JEFFERSON CITY - The Missouri House Budget Committee Chairman is calling on Gov. Bob Holden to release some of his $240 million in withholdings to public schools because state revenues are up.

However, it is too early to consider releasing the withholdings, state Budget Director Linda Luebbering said. A Department of Revenue report released Friday said Missouri collections are up nearly 8 percent.

House Budget Committee Chairman Carl Bearden, R-St. Charles, said that Missouri's economic growth will be sustained and calls for a reevaluation of the need for Holden's withholdings.

"I think that we will see growth enough to sustain the budget we passed," Bearden said.

The revenue increases are not enough to release the spending withholdings announced by Gov. Bob Holden, Luebbering said. However, the governor's office will reassess Missouri's budget in December, she said.

"After we reassess the situation, there is a possibility, not a certainty, that some of these withholdings may be released," Luebbering said.

Holden withheld the $240 million from the state budget in July. Education took the biggest hit. State schools accounted for nearly 80 percent of the withholdings.

The revenue increases were announced Friday by the Missouri Department of Revenue. State collections are up 8 percent for the past three months compared to the same period last year. Revenue for September increased by 10.5 percent over collections in 2002. The Missouri legislature has assumed 5 percent increase to fully fund the state budget.

"It's good that it's a positive number," Luebbering said. "It hasn't been positive for some time."

However, Luebbering warns that the report offers an estimate that is artificially high. Tax refunds were not paid in June 2002, so a greater amount were paid in the following months. As a result, revenue numbers look better over the same period this year.

Luebbering said gross collections, which ignore refunds in accounting revenue, better indicate Missouri's economic condition than net collections, which are reported by the Department of Revenue. Gross collections for the state are up 3 percent, Luebbering said.

Missouri also has a difficult year ahead, Luebbering said. The current budget year, that began July 1, is padded with relief from state bonds and federal funds, which won't be available for the next fiscal year.

"Those one-time revenue sources are just really going to come back and hurt us next year," Luebbering said.

But if the state can maintain revenue increases, even at a rate lower than 7.9 percent, federal funds will not have to go toward this year's budget, Bearden said. The money, $200 to $300 million, would be available for next year.

Senate Appropriations Chairman John Russell said he takes a cautious approach to the revenue figures.

"It is hard to say this is a firm growth figure that we can rely on for the rest of the year," he said.