Holden calls for tax hikes

JEFFERSON CITY, Mo., Jan. 15 (UPI) -- Saying Missouri faces its most serious budget crisis since the Great Depression, Gov. Bob Holden Wednesday called for new taxes to create jobs and improve education.

Holden said the state is facing a $1 billion budget deficit for fiscal 2004. Half of the state's $6.8 billion budget is earmarked for elementary and secondary education, with the other half targeted to services for the mentally ill, the disadvantaged and public safety.


"You have a unique opportunity to offer wisdom, experience, and knowledge to help us meet the most challenging budgetary situation faced by our state since the Great Depression," Holden told lawmakers in his State of the State address.

Holden noted Missouri is not alone in its budget misery.

"But knowing that other states share this dilemma does nothing to solve the problems here," he said. "We have to do that ourselves and it will take a united, focused effort on the part of those in this room today.

"It is time for some plain Missouri talk."

Holden said the state already has cut $1.1 billion from its fiscal 2003 budget and further cuts will hurt the state's most vulnerable. He said he is not willing to follow the examples set by Arkansas or Colorado where schools have been forced to shut down one day a week, or Kentucky where the governor ordered the early release of 567 prison inmates to save money.


Instead, Holden called for closing corporate loopholes, increasing the entrance fees on gaming boats by $2, raising the gross receipt tax on gaming by 2 percent, eliminating loss limits, imposing a cigarette tax increase dedicated to health care, and imposing a 5 percent surcharge on individual income taxes for households making more than $200,000 annually.

"If implemented, these actions will prevent deep cuts," Holden said. "My plan ensures that we continue toward a goal of a leaner state government. But I do not want it to be a meaner state government."

Holden called for a 1 point reduction in the corporate tax rates, at the same time pledging businesses still will "pay their fair share."

"Reducing the corporate tax rate will provide support for Missouri businesses in a time of economic challenge with the goal of growing the economy and creating jobs," he said.

He also proposed economic incentive programs to attract new businesses and retain those already in the state. However, the incentives will be tied to capital investments to assure continued operations.

Holden proposed a constitutional amendment that would make the governor responsible for the transportation system and called for improvements to education to create a "knowledge-based" economy.


"We must make our colleges, universities and technical schools the engines that fuel our economy of the future," he said.

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