Republican leaders at the State Capitol have come up with an alternative to Governor Bob Holden’s proposal to sell tobacco settlement securitization bonds to deal with Missouri’s budget shortfall. House Speaker Catherine Hanaway of Warson Woods and Senate Leader Peter Kinder of Cape Girardeau have agreed to support a $480-Million bond issue if the money is used to deal with budget gaps in two years of state budgets instead of one. Governor Holden had threatened to cut funding to elementary and secondary education unless the Legislature agreed to go along with a plan to sell the bonds. The bonds would be repaid with money from the state’s share of the national tobacco settlement. Following the announcement of the Republican proposal, Holden said he was delighted that legislative leaders were embracing the tobacco bonds. He wants them to approve the deal by February 15th. The Governor isn’t saying much about Republican suggestions that he come up with additional budget cuts in areas other than education.That plan would use $100-Million in bond proceeds to lessen the budget gap in the current fiscal year, which ends June 30th. The Governor still would have to cut at least $250- Million from the current budget.
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