On the Trail: Kansas' and Illinois' budget brinkmanship not likely in Missouri
Missouri lawmakers just wrapped up an, um, unusual legislative session. But they did manage to avoid some pitfalls that have recently plagued Kansas and Illinois, including:
- An endless deadlock stretching the legislative session into perpetual overtime.
- A governor taking to the road to castigate political rivals.
- Epic brinkmanship between the executive and legislative branches over tax hikes.
- A contest where the person who guesses the date of legislative adjournment correctly gets to dine with the great Steve Kraske of the Kansas City Star.
Both Illinois and Kansas encountered whopping budget deficits – and have either experienced or about to experience bitter extended legislative sessions to come up with a solution.
In Illinois, Gov. Bruce Rauner, a Republican, is wrestling with Democrats who control the legislature to try to pass his agenda – which could lead to some tax hikes. Things were even more dramatic in Kansas, where the struggle over passing a sales tax hike to close the budget gap resulted in the longest legislative session in the Sunflower State’s history.
These two scenarios aren’t really possible in Missouri because the state’s constitution severely restricts legislators from raising taxes. The “Hancock Amendment” requires statewide votes to pass tax hikes over a certain amount – which takes away the “raising revenue” option during tough budgetary times.
State Sen. Ryan Silvey is a former House Budget Chair and the vice chairman of the Senate Appropriations Committee. He said there's a relatively simple reason why the Missouri budget process doesn't resemble Kansas or Illinois.
“The fact that we have to go to the voters to approve any substantial increases in revenue protects us from getting into this situation,” Silvey said.
“When we don’t have the revenue, it’s just a matter of where are we going to cut?” he added. “When everybody’s on the same page that that is the only option, it’s easier to reach those conclusions.”
If Missouri were in a situation like Kansas where the legislature could raise taxes at their will, Silvey said, people “would see more of a fight on a year-to-year basis between the side that wants to spend more money and the side that wants to live with the revenue that’s been generated currently.”
“I think it’s honestly the best arrangement,” Silvey said. “Because ultimately the people decide how much revenue we’re going to get. If we go through a cycle or two of cutting services and the public feels that those are needed services, then they’d be more tolerant to a tax increase down the road. It’s always easier for the legislature knowing that the people make the ultimate decision on that.”
State Rep. Jeremy LaFaver, D-Kansas City, said Missouri’s constitution requires the budget to be finished at a certain time – and failure risks triggering a special session.
“Without fail, every legislature stalls for the first half or more,” said LaFaver, who lobbied in several states before being elected to the Missouri General Assembly. “And they wait until the very, very end to get all of the work done.”
LaFaver also said the Hancock Amendment may affect how Missouri lawmakers pursue tax policy. For instance, he said Missouri legislators may not be enthusiastic about phasing in tax cuts all at once – like Kansas did with several business-related tax cuts.
“Having the Hancock Amendment has put people on pause to some extent about larger cuts,” LaFaver said. “Because they know if it doesn’t work out, as hard as it is to fix the problem in Kansas, if Missouri did the same thing we wouldn’t be able to fix it. We would have to go to the vote of the people to fix it, but I don’t think you could do it. I don’t think that’d be successful.”
That's not to say that Missouri has avoided contentious budget fights – but they don’t really resemble Illinois or Kansas that much.
Senate President Pro Tem Tom Dempsey, R-St. Charles, recalled on Twitter a big fight over tapping the state’s “rainy day fund” during Gov. Bob Holden’s administration. And there are often battles over specific programs that get cut.
But most of the time, Missouri lawmakers don’t have many options -- besides cutting services -- during bad economic times. LaFaver said that might not be a good thing, adding that while “Kansas is bad right now and it’s embarrassing … at least they have all their options on the table.”
“They will come to a point where they will do some revenue enhancement, some cuts. And at the end of the day, they’ll do what needs to be done,” said LaFaver last Thursday. “But at least they have all the tools available to them to do it. If Missouri did something like this – and we may be faced with it – all we would have to do is cut. Yes, it would be very orderly, neat and clean. But the result is cutting an awful lot of services to an awful lot of people.”
Some Democrats fear that tax cuts passed in 2014 may force Missouri lawmakers to make difficult cuts over the next few years. But Silvey said that the cuts are gradual enough to avoid a Kansas-like showdown.
“It’s never been a secret to anyone in the legislature that I want to be the chairman of Senate Appropriations as I was in the House,” Silvey said. “So looking down the road, I thought about those things. Am I going to have to deal with that kind of a decrease in revenue? I don’t think that’s going to be the case, mainly because it’s gradual and also because it’s triggered by increases in revenue year-over-year.”
“So revenue has to grow before taxes will be cut,” he added. “That’s a much more reasoned approach than what Kansas did a few years ago – without trying to Monday morning quarterback tax policy.”
On the Trail, a weekly column, weaves together some of the intriguing threads from the world of Missouri politics.