No fund cuts for schools in GOP budget

JEFFERSON CITY, Mo. -- Republican legislative leaders outlined a plan Tuesday to cover Missouri's budget shortfall without cutting education funding or relying entirely on the state's tobacco settlement.

Democratic Gov. Bob Holden responded with a mix of concern and delight -- pleased that Republicans were working with him to avoid education cuts but uncertain yet if all of their proposals could work.

State officials are working on a tight timeline to try to cover a budget shortfall of more than $300 million for the fiscal year that ends June 30.

Holden has asked lawmakers to authorize bond sales against the state's future revenue from a national settlement with big tobacco companies. That would net about $375 million for the state, $350 million of which Holden wants to use to cover this year's budget shortfall.

The alternative, Holden has warned, would be to cut more than $350 million from public schools and state colleges.

During a private meeting Tuesday with Holden, Republicans proposed to use just $100 million from the tobacco bond sales this year and save the rest of that money for later.

To cover the remaining shortfall, Republicans proposed $250 million in savings, including:

$85 million in cuts for state agency expenses on such items as equipment, supplies, travel and professional contracts. Republican budget leaders said that equaled between 50 percent and 75 percent of the money that remained for such purposes and had not already been obligated through contracts or purchase agreements.

$84.5 million by carrying over less money from this budget year to the next and by starting next fiscal year with a lower cash balance than previously proposed. Republicans said their proposal simply mirrors what the state did for the current fiscal year.

$50 million by delaying until next fiscal year any tax refunds resulting from last year's Supreme Court ruling that Missouri had wrongly imposed sales taxes on the purchase of equipment used to transmit telephone calls. Republican leaders said the precise amount of the state's payout was under appeal and is unlikely to be resolved until later.

$30.5 million by delaying a new pharmacy building at the University of Missouri-Kansas City. Although design work already has begun, construction has not, Republicans said, so the project could be pushed back to an unspecified time.

"This represents a good-faith effort and a bunch of tough choices to try to avoid the deep cuts in education that the governor has said was the only alternative," said Senate President Pro Tem Peter Kinder, R-Cape Girardeau.

Kinder announced the plan with House Speaker Catherine Hanaway, R-Warson Woods, and the budget committee chairmen of the two chambers.

Hanaway described the proposal as a compromise with Holden.

"It's the least worst alternative," she said.

Holden said he was pleased that Republicans had agreed to his proposal to sell the rights to a share of Missouri's tobacco settlement -- even if disagreement persists about how much of the bond money to use this year.

Hanaway and Kinder said their Republican caucuses were unlikely to go above their proposed expenditure of $100 million in bond proceeds this year.

Holden said his budget staff had previously considered and rejected most of the proposals the Republicans put forth. He expressed concerns, for example, about leaving the state with too little money on hand to begin the next fiscal year. But he said he has directed his budget staff to conduct a fresh review of all the proposals.

While reserving judgment on their plan, Holden said he was glad Republicans had brought forth some ideas.

"I want to work with them," Holden said. "I'm delighted they're working with me, trying not to make the cuts in education."