Briefing Paper No. 20

Missouri’s Hancock II Amendment: The Case for Real Reform

By Dean Stansel
October 17, 1994

Executive Summary

In November 1980 Missouri voters approved the Hancock amendment, a constitutional amendment intended to prevent the Missouri state budget from growing faster than the Missouri family budget. Since then the effectiveness of that amendment has been eroded as legislators have discovered ways to evade its restrictions by exempting certain revenues from the cap. Those evasions have cost Missourians $5 billion in higher taxes.

On November 8 voters in Missouri can repair the Hancock amendment by enacting the Hancock II amendment. Because it more precisely defines “total state revenue,” Hancock II would be more difficult for politicians to evade.

The opposition’s scare tactics—claiming that Hancock II will require a $1-billion tax refund and necessitate massive spending cuts and service disruptions—are inaccurate and misleading. Any reduction in spending that may be necessary to comply with Hancock II would be only about one-eighth the size of the opposition’s alarmist predictions.

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Dean Stansel is a fiscal policy analyst at the Cato Institute.