JEFFERSON CITY — Lawmakers, who often liken budgeting to a family balancing its checkbook, might need to transfer money from the state’s savings account to cover checks written during the 2007 legislative session that ended Friday.
With state revenues booming and the state economy growing faster than expected, lawmakers started the 2007 session with a several hundred million dollar surplus. In fact, the state’s $21.5 billion budget for next year sets aside $200 million in savings for future years.
But with tax cuts for Social Security and some private pensions, plus an incentive program for businesses that bloated into a magnet for other tax breaks, many lawmakers are now worried about the final cost of their tax cutting.
Concern about that cost prompted legislators in the last week of the session to start cutting costly provisions from other bills and, in some cases, simply killing entire bills.
House Budget Chairman Allen Icet, R-Wildwood, said lawmakers anticipated spending about $40 million on tax breaks — a mark that they likely exceeded by tens of millions of dollars.
Gov. Matt Blunt called setting aside the $200 million a historic decision. He has not said whether he will sign the massive economic development bill. The business incentives contained numerous errors, and lawmakers were able to correct only some of them.
Although legislative critics questioned the bills’ costs, few actually voted against them.
Yet the cost of the tax cuts has led some Republicans to question whether tax credits generate enough new revenue to pay for the loss of state funds.
During floor debate about the massive economic development bill, Sen. Matt Bartle warned that lawmakers had “become drunk on tax credits, absolutely drunk.”
Bartle, R-Lee’s Summit, said he’s not opposed to all tax credits but urged a full review to determine which were working and which were not.
“We need to step back and look at the bigger picture because some are like a welfare program but for the wealthy,” he said.
House Speaker Rod Jetton, R-Marble Hill, said cost estimates for the two proposals don’t consider the new revenues that could be generated when people or businesses receiving the money spend it. He predicted that consumer spending and business expansion would combine to make up for the lost revenue from the state coffers.