HCS HJR 23 -- LIMITS ON STATE APPROPRIATIONS

SPONSOR:  Icet

COMMITTEE ACTION:  Voted "do pass" by the Committee on Budget by
a vote of 16 to 13.

Upon voter approval, this proposed constitutional amendment
prohibits appropriations in any fiscal year from exceeding the
total state general revenue appropriations from the previous year
by more than the appropriations growth limit.  The appropriations
growth limit will be the greater of zero or the sum of the annual
rate of inflation and the annual Missouri population growth.

In any fiscal year when the net general revenue collections are
in excess of 1% of the authorized net general revenue
appropriations allowed, 67% of the excess is to be transferred to
the Cash Operating Reserve Fund and 33% to the Budget Reserve
Fund, which are created by the substitute.  Any revenue in excess
of the specified limits of the funds will be transferred to the
Taxpayer Protection Stabilization Fund, created by the
substitute, and used to temporarily reduce the individual income
tax rate when the Commissioner of the Office of Administration
determines that sufficient amounts exist in the fund for at least
a .25% reduction.  The substitute authorizes the General
Assembly, by a two-thirds majority vote, to appropriate money
from the Taxpayer Protection Stabilization Fund if the
commissioner determines that total state general revenue
appropriations will exceed projected state revenues.

Total state general revenue appropriations may exceed the
appropriations limit only if the Governor declares an emergency
and the General Assembly, by a two-thirds majority, approves
appropriation bills to meet the emergency.  The funds
appropriated to meet the emergency will not increase the
appropriation limit for the succeeding fiscal year.

New or increased tax revenues or fees receiving voter approval
will be exempt from the calculation of the appropriations growth
limit for the year in which they are passed.

Sixty-seven percent of the balance in the Budget Reserve Fund on
July 1 of each year is to be transferred to the Cash Operating
Reserve Fund.  If the balance in the Cash Operating Reserve Fund
exceeds 5% of the net general revenue collected in the previous
fiscal year, the excess amount will be transferred to the
Taxpayer Protection Stabilization Fund.

In any fiscal year in which the Governor reduces expenditures
below amounts appropriated, the Governor may request an emergency
appropriation from the Budget Reserve Fund.  If the request is
approved by the General Assembly, funds may be restored to any
expenditure authorized by existing appropriations.  If the
balance in the Budget Reserve Fund at the end of a fiscal year
exceeds 7% of the net general revenue collections for the
previous fiscal year, the excess funds will be transferred to the
Taxpayer Protection Stabilization Fund.  If the balance is less
than 7%, the difference will be transferred from the General
Revenue Fund within five years.

Funds appropriated from the Budget Reserve Fund must be paid back
within five years of the original transfer date.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of $0 in
FY 2010, $0 in FY 2011, and $64,448,584 in FY 2012.  Estimated
Income on Other State Funds of $0 in FY 2010, $0 in FY 2011, and
$64,448,584 in FY 2012.

PROPONENTS:  Supporters say that the bill will limit the growth
of government spending, provide long-term fiscal planning and
rainy day funds, help balance the economic highs and lows,
protect programs and funding, reduce income tax rates, and create
a better business environment.  The bill doesn't apply to local
governments and will not limit the power of the legislature to
appropriate funds between programs.  Colorado's TABOR is
accomplishing exactly what it was designed to do, and it remains
the most effective tax and spending limit in the country.  Unlike
Colorado, adjustments have been made in the bill to prevent the
ratchet-back effect.

Testifying for the bill were Representative Icet; Taxpayers
Research Institute of Missouri; Associated Industries of
Missouri; and Americans for Prosperity and Foundation.

OPPONENTS:  Those who oppose the bill say that it places a new
constitutional lid on state spending growth that contains an
excessive growth restriction formula and is similar to Colorado's
TABOR that hurt the state by reducing funding for education and
health care for its citizens.  Missouri has a current limit, the
Hancock Amendment, which protects taxpayers.  The bill ties state
spending to population growth plus inflation, is constitutional,
and has a ratchet effect since Missouri's future spending will be
tied to today's historic budget levels.  Education and other
state-supported services typically grow at a pace significantly
greater than inflation.  Establishing the Rainy Day Fund is
beneficial to the state.  The bill could result in an increase in
property taxes and erode Missouri's ability to fund the education
formula, higher education, public transportation, highways,
infrastructure, parks, health care, mental health services, and
other needed programs.  The bill might work for a while, when
times are good, but inevitably will become a restriction that
prevents needed accommodations to changing economic circumstances
and causes the burden for vital services to shift to the local
level and to individuals.

Testifying against the bill were Missouri Budget Project;
Partnership for Children; Cooperative School Districts of Greater
Kansas City; AARP; Catholic Charities Archdiocese of St. Louis;
Missouri National Education Association; Penney Rector, School
Administrators Coalition; Missourians for Tax Justice; Missouri
Association for Social Welfare; Greater Kansas City Chamber of
Commerce; Missouri Hospital Association; Paraquad, Incorporated;
The Whole Person, Incorporated; DeAnna Noriega, Services for
Independent Living; Wayne Lee; Missouri Association for Community
Action; Missouri Federation of Teachers and School Related
Personnel; Kristi Sobbe, Covenant House Missouri; Lutheran Family
and Childrens Services of Missouri; and Susan McLoughlin, Mother
and Child Health Coalition.

Missouri House of Representatives
95th General Assembly, 1st Regular Session
Last Updated November 17, 2009 at 9:26 am