With the stroke of a pen the state of Missouri on Thursday effectively lost $1.3 billion. Now that should create political chaos under most circumstances. But in this case, there was barely a ripple. Time will tell if that changes.
With Gov. Bob Holden and Lt. Gov Joe Maxwell voting in favor and Attorney General Jay Nixon opposed, the state authorized the sale of bonds from the future tobacco settlement funds earmarked for the state. What that means is that Missouri will gain some much-needed short term financial relief by sacrificing future tobacco settlement payments. Holden and Maxwell will be long gone from state politics when the real impact strikes Missourians. After all, $1.3 billion is a lot of money to sacrifice to balance the current state budget.
Many other states also face a budget crunch this year with a faltering economy and continued fallout from the Sept. 11 tragedy. And most states are taking some radical action to address these budget shortfalls. Tennessee colleges, for example, were shutdown temporarily to save state funds. State employees in other states have been furloughed to save funds. But Missouri opted to spend future revenue to shore-up the current budget. Time will tell if this move was the right one.
Holden took strong measures to reduce state services in some areas to battle the budget problem. But then revenue projections were better than expected however he declined to restore any of the cuts in nursing homes or higher education. That move has irked some lawmakers who have called for a restoration of the cuts.
Thursday's bond sale will pump $50 million into the state coffers. That may relieve the current pain but I can't help but wonder how we'll feel down the road when those tobacco dollars have evaporated. Let's all hope the economy improves before that day arrives.