Amendment 3 - November 2: Highway-only gas tax -> Big cuts to social services
From Amy Blouin, Missouri Budget Project:
If passed, this ballot would cost general revenue $187 million by fiscal year 2009. Clearly, this funding would need to be cut from another area like health care, mental health, education, or many of the other critical services the state offers.
The proponents of this amendment are the Missouri Chamber of Commerce and highway construction industries. So far there has been little vocal opposition to the amendment.
We must work to generate this opposition, or see more cuts in our programs. Missourians for Tax Justice has established a committee to work to fight Amendment 3. However, in the absence of funding to create a large scale media campaign, it will take a good deal of "people power" to prevent the passage of Amendment 3.
Therefore, in our role at the MBP we would like to distribute the attached information through the MCBPP coalition members. Please distribute as widely as possible - to your staff, clients, board members, etc. We can beat this thing if we work together. We will be creating a "free" media campaign - op-eds, letters to the editor, etc. We will also be creating some brief talking points that everyone can use to succinctly describe why it's bad for Missouri. We'll get these out to you ASAP.
In the meantime, we are contacting as many diverse groups as possible, including education and higher education contacts, unions, and others. If you have any groups that you think should know about this, please forward the information to them.
As many groups who can state publicly that they oppose Amendment 3 would obviously greatly help!
Please let me know what your organization is comfortable with. If you want to join the official campaign against this, please contact Pat Martin at Missourians for Tax Justice at email@example.com
Thanks so much for your work on these critical fiscal issues! Amy
September 16, 2004
Amendment 3: Deciding Missouri's Priority-Is it Roads or Kids?
On November 2, 2004, Missouri voters will be asked to vote on Amendment 3. The amendment modifies the current distribution of the State's motor vehicle sales tax collections by diverting the majority of these funds to a new State Road Bond Fund. If passed, the amendment would cost state general revenue $187 million by Fiscal Year 2009. The following details the major points of the amendment:
How is the motor vehicle sales tax currently used?
Before 1979, all of the state's motor vehicle sales tax directly benefited state general revenue. In 1979 a constitutional amendment passed that required half of the tax collections to be earmarked for transportation functions including the state road fund. The other half remains as a part of state general revenue today.
How does the amendment differ from what is currently done?
Amendment 3 would redirect the motor vehicle sales tax funds that currently go to state general revenue and place the majority into a new state road bond fund. The funds will be used to pay back state bonds for highway construction or reconstruction.
What is the impact on General Revenue?
Amendment 3 would be phased in over a four year period, consequently the cost to state general revenue increases over time. In fiscal year 2006, general revenue would lose $73.2 million increasing to a loss of $187 million by fiscal year 2009.
What is the impact on state services?
General Revenue funds the majority of the state's services, including elementary, secondary and higher education, health care for seniors, kids and working poor families, nursing home oversight, mental health care, foster care and other services for abused and neglected children, and local health departments. As a result of the states budget crisis, general revenue has been depleted, and is arguably not likely to absorb a $187 million cut in funds without cuts in other programs. The services mentioned here will face more cuts as a result of the diversion of general revenue to the State Road Bond Fund.?
Doesn't Transportation need the money?
While ensuring that transportation is funded appropriately is a laudable goal, there are more fiscally responsible policy options available. Diverting funding from current critical needs such as the education of Missouri children is not the way to meet transportation needs. Additionally, Missouri is 6th in the nation for the amount spent on roads per citizen.
What about public transportation?
Public transportation would benefit by only a minuscule increase in funding if Amendment 3 passes. Currently, the total budget for the state's multi-modal fund (public transportation fund) is about $18.5 million. Amendment 3 would increase public transportation funds by just 1% of the motor vehicle sales tax revenues, or about $1 million per year. Individuals and communities that rely on public transportation will not be helped by Amendment 3.
What about the state budget cuts - do we have enough money to do this?
The Fiscal Year 2002 - 2004 fiscal crisis in Missouri resulted in significant core cuts to vital programs, totaling more that $1.3 billion dollars. As a result, the state enters FY 2005 with a series of unmet needs and program deficits in need of restoration including:
Missouri's school foundation formula is underfunded by $600 million, according to the Department of Elementary and Secondary Education.
Higher Education cuts of $70 million have resulted in a $1,700 average tuition increase for Missouri's four-year institutions, as well as class consolidations and limiting of course offerings. The cuts and tuition increases affect 88,000 Missouri students.
The Department of Mental Health has lost about $58.2 million in state general revenue as a result of the fiscal crisis. Nearly 600 jobs have been cut from the department, 4,000 developmentally disabled Missourians are on a waiting list for mental health care services, and 4,000 individuals lost mental health care services related to substance abuse.
Significant cuts to Medicaid eligibility resulted in at least 37,000 less Missourians having access to healthcare; at the same time health care costs are increasing, and more Missourians may be turning to publicly-funded health care for their families.
Furthermore, in the next decade, Missouri will start to see a dramatic increase in healthcare need for seniors entering retirement.
In addition, should the Transportation Ballot Issue be approved by voters in November, this will result in additional loss to the General Revenue fund of between $160 - $180 million beginning in FY 2006.
While legislators and the public may disagree regarding whether or not the full level of budget cuts should be restored, it is clear that education and health care are priorities for Missourians. At minimum, the state would need more than $900 million to restore these few basic services to their pre-fiscal crisis programming level. Clearly, the anticipated $147.8 million growth in general revenue in FY 2005 will not be enough to meet this need. An additional cut to general revenue resulting from Amendment 3 would cause further harm.
Given the fragile state of General Revenue, Missourians must decide when voting in November what their true priority is: Is it roads or education, health care and other critical services for Missouri's children?
*Data on the impact of Amendment 3 is compiled from information from Missourians for Tax Justice, and the State Office of Administration. Data on the state's fiscal crisis, and budget cuts was compiled from state department information by the Missouri Budget Project. For more information on the state fiscal crisis, see "Missouri's Revenue Situation: Is the Fiscal Crisis Really Over?" Missouri Budget Project, August 12, 2004 and "FEDERAL POLICIES ARE WORSENING MISSOURI'S BUDGET PROBLEMS" Center on Budget & Policy Priorities, September 15, 2004. Both documents are available on the Missouri Budget Project's website at www.mobudget.org