MDN.ORG:
Missouri Digital News
MDN.ORG
Mo. Digital News
Missouri Digital News
MDN.ORG:
Mo. Digital News
MDN.ORG:
Missouri Digital News
MDN.ORG:
Missouri Digital News
MDN.ORG
Mo. Digital News
Missouri Digital News
MDN.ORG:
Mo. Digital News
MDN.ORG:
Missouri Digital News
JEFFERSON CITY -The Senate on Monday gave preliminary approval to a bill that would allow the state to borrow $120 million from the Emergency Reserve Fund, dubbed the rainy day fund. This money would be used to help balance the budget for fiscal year 2002, which expires June 30.If the bill is approved, the legislature will be required to repay one-third of the amount borrowed from the rainy day fund plus interest next fiscal year, which begins July 1.
Sen. Danny Staples, D-Eminence, expressed confidence in bill sponsor and Senate Appropriations Committee chairman John Russell, R-Lebanon. "If you say we need to pass this bill, we need to pass it," Staples said to Russell. "I know you will not lead this body astray."
The Senate approved the bill by a vote of 31 to 2.
Russell said part of the borrowed money would go to tax refunds. One question discussed was whether passing this bill would ensure refund payments.
Russell said if the state is unable to pay all tax refunds this year, it could hold payments over to the next fiscal year. But the state would then have to pay 6 percent interest, which Russell said "adds to the state's liability."
Senate President Pro Tem Peter Kinder, R-Cape Girardeau said Gov. Bob Holden's chief of staff told him earlier Monday the state will be able to pay tax refunds on May 15.
May 15 is the state's deadline to repay $225 million it previously borrowed from the rainy day fund for cash flow purposes. This repayment would bring the fund's total to around $450 million. The state can borrow any amount from the fund for cash flow purposes throughout the year without legislative approval, but must repay it by May 15.
The state can only borrow up to half the amount in the rainy day fund, however, for budget stabilization purposes. Russell's bill proposes bowworing $120 million for budget stabilization and therefore must be approved by two-thirds of both the House and Senate. The state would have three years to repay the borrowed money.
Sen. John Loudon, R-Ballwin, one of two senators to vote against the bill, said borrowing from the rainy day fund would be like "paying one credit card with another." He said the state was like a shopper who spent too much.
Loudon said legislators are asked to "swallow" the proposal. "I'm having trouble swallowing at this point," he said.
Russell compared the state to a business instead of a shopper. He said in a business, if a customer comes up short, the business owner has the choice to delay his payments or to go to the bank and take out more money.
Russell said although he may disagree with some of the state's expenditures this fiscal year, "the state has to pay it's bills."