Capitol Perspectives: Mel Hancock’s Legacy
It would be difficult to exaggerate the legacy to Missouri of Mel Hancock, who died Sunday [Nov. 6] at the age of 82. In many ways, the Springfield businessman and congressman was Missouri’s first tea party member.
Three decades ago, he was the leader of the state’s anti-tax movement that won voter approval for a constitutional amendment on how much money the state can spend. The anti-tax sentiment that his proposal ignited among voters led politicians to adopt even deeper cuts in Missouri’s tax base.
Just as great a legacy is how his original proposal changed the relationship between the state and its local communities.
Hancock led the successful 1980 petition campaign to impose a revenue limit on state government. His Hancock Amendment limits how much revenue the state can spend and forces the state to refund excesses back to taxpayers.
In the early years, that limit triggered nearly $1 billion in tax refunds. Later changes in tax rates and the economy made the original Hancock “lid” largely irrelevant. It likely will be a generation or more before Missouri exceeds that limit again.
But in political reaction to the anti-tax sentiment Hancock’s petition campaign had demonstrated, the state’s governor and legislature passed a sweeping package of tax cuts that constrain the state’s budget to this day.
The tax cuts were adopted at a time when state revenues were increasing at an unusually high rate. So, supporters argued, the state could afford the cuts.
There were a few who warned that it would be a mistake to base tax policy on short-term trends — that for every boom cycle in tax collections there follows a bust. But in the aftermath of the Hancock Amendment, political pressures to cut taxes were too great.
The warnings of those few critics have proved to be true. Missouri now suffers from a bust cycle for tax collections. Taxes are growing at a far lower rate than the growth of the demands for state spending.
For example, in the past few years, the shortfall in state revenues has prevented the legislature from providing local public schools with the minimum amount of state funds required by state law. Effectively, the state’s system for funding local schools is illegal because of the disconnect between state spending demands and the state’s tax base.
Missouri’s current revenue problems should not have been a surprise for state policy leaders.
Not too many years after the state adopted those post-Hancock tax cuts, a former state budget official gave talks warning about the disconnect. The warnings, and a later formal report, came from Jim Moody. Now a leading lobbyist, Moody had been a top administration official in the state.
In what became known in the statehouse as the Moody Report, he warned that those post-Hancock tax cuts had ended Missouri’s ability to finance, on a long-term basis, “the basic functions of government” that are defined by law.
To this day, Moody stresses he was not necessarily suggesting tax increases but rather that the state’s budget obligations need be brought into line with long-term tax-collection realities — a task yet to be accomplished.
The other legacy Hancock left for Missouri involves local government.
Hancock feared that with his cap on state revenues, state politicians would respond by imposing greater demands on towns, counties and other local governments to provide expanded services that the state could not afford.
So Hancock included a provision in his constitutional amendment that requires the state to cover the costs of any new obligation the state imposes on local government. The legislature cannot even give county officials a pay raise without footing the bill.
No longer was the state of Missouri the complete boss over local government. The Hancock Amendment has handed to towns and counties a level of independence that likely was unforeseen by the framers of Missouri’s constitution.
I cannot finish this column without expressing my personal fondness for Hancock. He was outspoken, candid, blunt and always accessible — the ideal news source for a reporter.
But there’s more than that to my fondness for him. Unlike some of the other political figures I have covered, Hancock never seemed to take tough questions personally. And, believe me, we had some pretty tough interviews. No matter how hard I might have been in an interview, afterward he always made it clear that he understood my professional obligations to ask the tough questions. Actually, I think he enjoyed the verbal sparring.
That will be my lasting memory of Hancock — his passion and eagerness to debate the issues about which he felt so deeply.
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