LEGISLATIVE DISAGREEMENTS KILL ELECTION-YEAR TAX CUT (FIRST OF A THREE-PART SERIES)

Missourians won't see a state tax cut this year.

Lawmakers couldn't agree on proposals to reduce the state's surging revenue by at least $150 million to bring it under a constitutional tax lid.

The state must refund income-tax money to Missourians this year and faces the prospect of a continuing series of such refunds in the future if it doesn't cut taxes to comply with the Hancock tax-limitation amendment, Southeast Missouri legislators say.

Lawmakers on both sides of the political aisle predict that the legislature next year will seek a permanent tax cut.

They say the current refund system isn't an efficient way to deal with the Hancock tax lid.

The state budget director, Mark Ward, has estimated the average Missourian would receive a $41 refund, beginning in October.

But lawmakers say many will receive much less. State Rep. Larry Thomason, D-Kennett, said most Bootheel residents will get a refund of less than $41.

Gov. Mel Carnahan had initially called for a quarter-cent cut in the state's general sales tax. But in the end, the legislature couldn't even agree on a 2-cent cut in the sales tax on food.

Republican lawmakers pushed unsuccessfully for a $300 million tax cut in the just-ended legislative session.

They wanted to eliminate the 3-cent general sales tax on food, reduce the tax on private pensions and triple the state's dependent deduction from the current $400 to $1,200.

The House ended up passing a bill to reduce the sales tax on food by 2 cents. But the legislation died in the Senate.

"We wanted to make permanent cuts in taxes for the people of Missouri," said Rep. Mark Richardson, R-Poplar Bluff.

"Our state revenues are so flush, the governor was literally having to be creative to find places to spend the money," said Richardson, House minority floor leader.

"We could easily afford a $300 million permanent tax cut," he said.

Richardson predicted the lack of a tax cut will be a major issue in the November election.

State Sen. Peter Kinder, R-Cape Girardeau, said the state budget over the past four years has grown by almost $4 billion, an amount equal to the entire state budget in 1984.

Both Democratic and Republican House members from Southeast Missouri backed efforts to cut the sales tax on food, although they differed over just how big a cut to make.

"There is no question that was a disappointment," said Thomason.

Rep. David Schwab, R-Jackson, blamed the governor and the Democratic leaders in the House and Senate for failing to cut taxes.

The rank-and-file legislators in both parties would have supported a tax cut, he said.

Rep. Joe Heckemeyer, D-Sikeston, supported the proposed 2-cent cut in the sales tax on food. But he said the legislature must be careful it doesn't make drastic cuts that would hinder state government.

Heckemeyer said talk of a tax cut reached a feverish pitch in the 1996 session. "It is a political year," he said.

Heckemeyer favors reducing taxes on private pensions. Such legislation didn't make it through the session. But Heckemeyer said, "It is a good way to target a tax reduction to people that need it." Many of those with pensions are on fixed incomes, he said.

Sen. Jerry Howard, D-Dexter, said the fairest reduction would be an across-the-board cut in the state's general sales tax.

Howard said the tax-cut measure came up in the Senate late in the session and didn't get through because a handful of senators fought it and because there wasn't time to debate all the issues surrounding the bill.

Howard and other Democrats argued that Republicans in this election year didn't want a tax cut that the governor could take credit for.

Howard personally doesn't like the Hancock tax limitation amendment, which he views as a gimmick.

Howard said lawmakers annually could decide on the sales tax rate, but that would be inconvenient to businesses.

"The problem with cutting it every year, the average merchant isn't going to know what to collect," Howard said.

Howard said any tax cut must be considered carefully. "It is not just something you pick up today and pass tomorrow."