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Legislative budget leaders look to trim Blunt's spending plan

Thursday, February 14, 2008 | 7:37 p.m. CST; updated 8:41 p.m. CDT, Sunday, July 20, 2008

JEFFERSON CITY — Concerns about the economy are causing Missouri lawmakers to look for ways to trim Gov. Matt Blunt’s spending proposals.

Blunt has proposed a nearly $23 billion budget for next fiscal year, which would leave about $50 million not spent.

But House and Senate budget writers are looking to trim up to $200 million from Blunt’s budget proposals.

House Budget Committee Chairman Allen Icet wants to save most of that additional money in case the sluggish economy causes state revenues to come in below expectations.

Senate Appropriations Committee Chairman Gary Nodler would prefer to take the money cut from the core budget and spend it on one-time items such as building repairs and construction. He says that could better help stimulate the economy.

The caution in Jefferson City parallels that in Washington, D.C., where Federal Reserve Chairman Ben Bernanke told lawmakers Thursday the economy is deteriorating. He cited housing and credit troubles, high energy prices and a slowdown in hiring, and he forecast sluggish growth in the near term.

Part of the concern for many state legislatures is that the federal stimulus package signed into law Wednesday by President Bush includes business incentives that could reduce state income taxes. The Center on Budget and Policy Priorities estimates Missouri could lose $100 million. But states also could gain sales taxes if consumers spend the individual income tax rebates they will receive in the federal package.

Blunt made his budget recommendations before the federal economic stimulus legislation passed. So far, Blunt budget chief Larry Schepker has not recommended any changes to the spending plan the governor outlined last month, but that remains a possibility.

Blunt’s proposed budget sought to increase state spending at twice the expected growth rate for state revenues. Schepker said at the time that the disproportionate increase was possible because of a large amount of money carried over from past years of government savings and strong economic growth.

“If the economy does in fact slow down, the way the general consensus seems to be, if we don’t have much in the way of an ending balance,” Missouri could face financial troubles in future years, said Icet, R-Wildwood.

House leaders want to set aside more money than Blunt proposed, perhaps a total of between $150 million and $250 million, Icet said.

Nodler said he also would like to trim around $200 million from Blunt’s core budget recommendations so the state wouldn’t be committed to those additional ongoing expenses. But to just save that money would not be wise, he said.

“If you withhold spending that you can do, you deny the economic stimulus to the state’s economy that the spending can accomplish,” said Nodler, R-Joplin.

Nodler said Missouri has about $2 billion of deferred maintenance projects on state buildings. Redirecting some of Blunt’s spending toward those projects could help the economy by creating or sustaining construction jobs, he said.


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