The Missouri House last week approved a measure asking voters to consider a constitutional amendment to limit annual growth in the state’s general revenue fund budget.
The measure is now before the Senate. Under the proposal, the state could not increase spending above a combined rate of inflation and population growth. The proposed amendment would not affect state spending in the event of deflation and negative population growth.
Supporters believe the cap is needed to rein in spending, while opponents fear that spending in the areas of education and health and safety could suffer and spending flexibility could be limited.
The amendment also would create a special reserve fund to hold surplus revenue. After a certain maximum level, any additional surplus would go to reduce taxes. Under the proposal, Missouri also could take up to five years to repay any funds it borrows from the current reserve, up from a three-year repayment requirement now in place.