House criticizes sales tax proposal

JEFFERSON CITY, Mo. -- In another setback for Gov. Bob Holden's budget strategy, the House on Wednesday tabled a proposal to use overcollected sales tax revenue to help fund education and balance the budget.

The move came a day after a House committee set aside Holden's plan to apply unspent money from various treasury funds to a shortfall in the budget for the current fiscal year.

At issue Wednesday was Holden's proposal to put about $10 million in unclaimed, overcollected sales tax money toward the formula for aid to elementary and secondary schools.

House Democratic leaders wanted to "test the waters" to see if the proposal would get support in the chamber, said Damon Porter, chief of staff to House Speaker Jim Kreider, D-Nixa.

So while debating another bill, Rep. Jim Foley, D-St. Ann, proposed an amendment to let the use the unclaimed money for the education formula.

GOP amendments

The amendment successfully was added to a bill by Rep. Phil Smith, D-Louisiana, which would require businesses to prove that tax money returned to them would go only to the overcharged customers and not back to the businesses. The measure would apply to tax returns of $1,000 or more.

But Republicans, who had opposed the amendment, gutted the bill by taking away its power with more amendments.

Republicans argued that the proposal would make life harder for small business owners. And, they said, if business owners are fined for underpaying tax bills, they shouldn't struggle to get money back from overpaying.

"It would appear that you are putting more burdens on retailers -- the last thing we need to be doing," said Rep. Gary Marble, R-Neosho.

$30 million hole

Smith argued businesses shouldn't be allowed to overcharge customers on sales tax, knowing they can pocket the unclaimed return. Republicans, Smith said, were failing to support education by opposing the proposal.

"Boo!" came the loud response from the GOP side of the chamber.

On Tuesday, the House Budget Committee endorsed Holden's supplemental spending plan for this year without including his proposal to transfer unspent money from various treasury funds into general revenues to help cover a shortfall.

Holden's office said that left a $30 million hole in the fiscal 2002 budget, which would result in the need for more cuts.