JEFFERSON CITY, Mo. -- Because of a constitutional change voters approved last year, the Missouri Department of Revenue will no longer be able to retain sufficient revenue it collects from driver and vehicle licensing fees to cover its costs for issuing those licenses, the agency's director told a special commission reviewing the structure of state government on Friday.

Amendment 3, which voters ratified in November, shifted money out of the state's general fund and earmarked it for the Missouri Department of Transportation.

Prior to the amendment, the Missouri Constitution entitled the revenue department to recoup its actual costs for collecting transportation-related income, such as license fees and fuel taxes. Amendment 3, however, capped the revenue department's take at 3 percent of total collections.

Revenue director Trish Vinson told the Government Review Commission the cap will leave a $50 million hole in her agency's budget for the fiscal year beginning July 1. To fill the gap, the department is asking the Missouri Legislature to boost its general revenue appropriations by $32 million and to reduce spending. However, there is fierce competition among the various state departments for general revenue.

"Our licensing division was almost entirely funded by highway dollars," Vinson said. "Those moneys are going away as of July 1."

Commissioner Ray Wagner of Clayton asked if it might make sense to move the Division of Motor Vehicle and Drivers Licensing from the revenue department to MoDOT, since the latter agency gets the bulk of the proceeds. Vinson said she has raised that idea with MoDOT director Pete Rahn, but he wasn't interested.

Separate 3 percent caps apply to the different sources of money the revenue department collects for the state road fund, said license division director Julie Allen. For collecting fuel tax revenue, the department's costs are about one-half of a percent of total collections. Issuing licenses, however, costs well in excess of 3 percent of collections, although Allen couldn't immediately cite the exact percentage.

The review commission also heard presentations from the departments of insurance, public safety, corrections and the Office of Administration. Other departments will outline their functions to the panel over the next few weeks.

Upon taking office in January, Gov. Matt Blunt established the 20-member commission to spearhead the first major reorganization of state government in 30 years. The panel is charged with offering recommendations to the governor by March 2006.

Several commissioners asked department heads about possible opportunities for privatizing services currently provided by state workers. Department of Corrections director Larry Crawford said his agency has enjoyed success with outsourcing certain functions but found other areas where the state does a better job at lower cost than would a private business.

Privatizing medical services has enabled Missouri to lower costs to $8.15 per inmate per day, 40th lowest in the nation. Crawford said the department explored privatizing inmate educational services but found it would cost the state more.

The corrections department operates the eighth-largest school system in Missouri. Whereas the average annual per student cost for public school districts is $7,434, corrections does the job for $2,500 per student. The department's general education diploma program boasts an 81.2 percent graduation rate.

"I joke that we have less problems with truancy than public school districts, but we certainly face other challenges," Crawford said.

mpowers@semissourian.com

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