HCS HJR 49 -- LIMITS ON STATE APPROPRIATIONS

SPONSOR:  Lager

COMMITTEE ACTION:  Voted "do pass" by the Committee on Budget by
a vote of 12 to 11 with 1 present.

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 is
the greater of zero or the sum of the annual rate of inflation
and the annual Missouri population growth.

For any fiscal year in which the net general revenue collections
are in excess of 1% above the authorized net general revenue
appropriations allowed, in equal amounts, the excess is to be
transferred to the Cash Operating Reserve Fund and the Budget
Reserve Fund.  Any revenue in excess of the specified limits of
the funds will be refunded, pro rata, based on tax liabilities
reported in the tax year in which the fiscal year ended.

Total state general revenue appropriations may exceed the
appropriations limit only if the Governor declares an emergency
and the General Assembly 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.

One-half of the balance in the Budget Reserve Fund is to be
transferred to the Cash Operating Reserve Fund.  The Cash
Operating Reserve Fund's maximum balance is 5% of the net general
revenue collected in the previous fiscal year.  Funds in excess
of the maximum balance will be transferred to the General Revenue
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.  The Budget
Reserve Fund's maximum balance at the end of a fiscal year is 7%
of the net general revenue collections for the previous fiscal
year.  Funds in excess of the maximum balance are to be
transferred to the General Revenue Fund.  If the balance is less
than 7%, the difference will be transferred from the General
Revenue Fund.

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

FISCAL NOTE:  Not available at time of printing.

PROPONENTS:  Supporters say that the amendment will help in the
years when we have budget shortfalls.  The Hancock Amendment has
worked well and this will further help the appropriation process.
The states of Georgia and Colorado have similar language in their
constitutions, and it has helped them to weather the recent
budget shortfalls.  Amounts that can be appropriated each year
will already be set by the constitution.

Testifying for the bill were Representative Lager; and Missouri
Chamber of Commerce and Industry.

OPPONENTS:  Those who oppose the amendment say that the starting
point is wrong.  We do not want to be locked in during a low
income year.  There is a structural deficit of $700 million
starting this base year.  We need to make sure this is an
effective solution to budget stabilization and that it will cover
a shortfall if we have three successive bad years.

Testifying against the bill was Missouri National Education
Association.

Marc Webb, Legislative Analyst

Missouri House of Representatives
92nd General Assembly, 2nd Regular Session
Last Updated September 23, 2004 at 11:16 am