FOOD FIGHT: MISSOURI AND ILLINOIS DEBATE FOOD SALES TAX

A sales tax on food is an issue on the table on both sides of the Mississippi River.

Missouri lawmakers want to cut the state sales tax on food; Illinois lawmakers are considering reinstating such a tax.

The tax cut has bipartisan support in Missouri. Gov. Mel Carnahan and lawmakers in both parties favor eliminating a 3-cent state sales tax on food.

Carnahan and lawmakers say the cut is needed to slash state revenues and bring them in line with state constitutional limits imposed by the Hancock Amendment.

But in Illinois, Gov. Jim Edgar and some lawmakers said last week they would consider reimposing a state sales tax on food to help fund schools.

The state could raise about $667 million a year by taxing food sales at 5 percent, officials said. The sales tax would provide a way to lower property taxes as part of a school-funding overhaul.

Illinois eliminated its sales tax on groceries and drugs in 1984 as a way to help the poor.

In Missouri, Gov. Carnahan wants a permanent tax cut. "It is the fairest and fastest way to get money back in the pockets of working families," said Chris Sifford, the governor's director of communications.

The tax would save Missourians $230 million.

"That will mean about $137 a year to a family of four," Sifford said. The savings, he said, amounts to about a week's worth of groceries.

Sifford said the governor will push the tax cut in his state of the state address Wednesday.

Even with a tax cut, the state must refund some $147 million to taxpayers.

Many Republican lawmakers supported a food-tax cut a year ago and have again embraced the idea.

"This is a good solution right now," said state Rep. Mary Kasten, R-Cape Girardeau.

The tax cut won't eliminate the state sales tax on food, just reduce it.

The state would continue to collect 1.225 cents on food sales from sales taxes levied by voters for education, conservation, soils and parks.

Voter approval would be needed to eliminate those sales taxes, said Senate spokesman Mark Hughes.

Lawmakers can eliminate the 3-cent tax on their own, but it would likely take voter approval to reinstate it should political leaders want to do so in the future, he said.

A tax-hike cap on the books requires voter approval of any tax increase that would raise more than $50 million in a year or an amount equal to 1 percent of gross revenue.

Reinstating even a 1-cent sales tax on food would exceed the cap, Hughes said.

A St. Louis-based coalition called Missourians for Tax Justice is lobbying lawmakers to permanently cut the sales tax.

Pat Martin, who chairs the group, is concerned some lawmakers might try to make the tax cut a temporary one.

"That is totally unacceptable," she said. "Nothing is more regressive than a sales tax on food."

She said the tax hits hard at low-income residents, including senior citizens, who have to spend a large share of their income on food.

"We are one of only 20 states that still taxes food, and two of those are phasing it out," Martin said.

Martin said the tax cut isn't a tax giveaway for special interests, but a measure that would benefit the average citizen.

Two decades ago, an effort was made to eliminate the state sales tax on food and drugs through a constitutional amendment.

But Missourians rejected the measure in November 1976 by a 56-44 percent margin. Opponents, including statewide office holders, argued at the time that eliminating the tax would force the state to find new revenue sources or reduce services.

In Illinois, Senate President James "Pate" Phillips has proposed a sales tax on food as part of a tax swap plan.

Homeowners have complained that they bear too much of the burden in funding school districts. Meanwhile the funding gap between rich and poor school districts has widened.

Edgar said he prefers an income tax to a sales tax on food. Edgar said the latter is more of a regressive tax.

"I recognize people might have different opinions about what is a fair tax," he told reporters last week.

"There is no doubt it will take a bipartisan effort to pass something," Edgar said.

State Rep. David Phelps, D-Eldorado, isn't ready to jump on the sales tax bandwagon.

He said the idea of reinstituting a sales tax on groceries is just in the discussion stage.

"It has just been rhetoric so far," he said. "It is early. Bills are just starting to be put in."