The state's budget, a one-cent sales tax to help fund transportation needs, and tax collection on internet sales were among issues addressed by Rep. Mike Lair and Sen. David Pearce during an informal legislative roundup hosted Friday by the Chillicothe Area Chamber of Commerce.

The two Republicans representing the local district in the Missouri legislature expressed concerns over the governor's budget proposal.

"The governor gave us a smoking mirrors budget," Lair said. "He gave us a budget based on four pieces of legislation that haven't passed yet, and it's about a half billion dollars that we don't have that we are supposed to put into a budget."

Lair identified three possible scenarios, stating that the House chairman could file last year's budget and work from that, he could file the governor's budget, or the House can try to put together something "realistic" to file. Lair said that he anticipates a compromise budget will be put forward.

Pearce voiced support for the 1-cent sales tax plan proposed last week by the Missouri Highways and Transportation Commission, which, if passed by voters, is estimated to generate $750 million annually to improve roads.

"We have basically gone to a system of our highways where we are in maintenance mode," Pearce said. "We've gone from $1.1 billion dollars down to $600 million, so really, all we can do is status quo and maintain what we've got. There really are no new projects on the horizon."

Pearce stated that the only way the state's transportation system could improve is if the state looks at a revenue source.

"Nobody likes to raise taxes," he said. "No one likes to talk about that; but, you know, in transportation, and anything, you get what you pay for."

Other options considered are toll roads and an increase in the gasoline tax. Pearce said that toll roads (aside from opposition in Lafayette and Saline counties within his district), would not be a viable option, because the state would need to improve Highways 36 and 50 because motorists would skip the tolls and find alternate routes.

"I think this proposal that MHTC put out this week is probably the best option," he said, noting that he would favor putting the issue up to a vote of the people.

The two legislators also address streamlined sales tax (internet sales tax).

"The people who buy off the internet have always owed it, but there was no way to collect it," Lair stated.

He said the streamlined sales tax creates categories that have been "very murky" in the past. For example, he said, among the 50 states, there are 15 different ways that firearms are slotted into sales taxes.

Pearce said that legislators should consider the internet sales tax to help smaller businesses.

"A lot of people feel it would be a huge windfall to the cities or the counties," he said. "Most of my colleagues feel that if there is internet sales taxes that come in, it would be used to reduce personal income tax, or reduce corporate income tax, and so, overall, it would reduce the tax liability."

"To me," Pearce said, "why I think we should consider the internet sales tax, is not because it is going to bring a lot into the cities or counties, but rather it would level the playing field for our small business people."

He said that it is the smaller businesses that are at a disadvantage when comes to competing with catalog sales.

"If we can do it so that it helps small business, that would be good," Pearce said.

The senator noted frustration, though, because the major business organizations in the state, including the Missouri Chamber of Commerce, Associated Industries, and the National Federation of Independent Businessess, have kept quiet on the issue.

"They have not taken a stance on internet sales because they have businesses that get the advantage on both sides," Pearce said. "That sends a very mixed message to the legislature when it comes to internet sales."

Pearce is chairman of the Joint Committee on Education, and Lair is vice chairman. The two discussed education issues, including last week's draft on funding higher education. The model focuses on performance, providing incentives that support the state goal of increasing the number of Missourians with post-secondary degrees or credentials. The model also encourages institutions to target successful completions by low-income students.

"We are taking on a very tough issue... to come up with performance money for our higher education institutions — for our four years as well as our community colleges." Pearce said.

"I appreciate community colleges more than I ever did," said Lair, a retired teacher. "They are turning out people who are walking right into our economy, right into the jobs we have."

He said that of the freshmen at Missouri Western, half of them are the first in their families to go to college.

"That, in itself, is impressive," Lair said. "If we can break the cycle of poverty, by giving them a degree and giving them a skill and giving them a job, that's terribly significant.

"On the other end of the spectrum," Lair continued, "you have Truman. Truman is highly selective. Truman is a liberal arts institution. It educates the whole person. How do you treat them fairly?"

The need to design a new model was a result of the passage of House Bill 1731 last year. That bill required the joint committee to develop a model for appropriating funds to public higher education institutions by Dec. 31, 2013.

The legislators commented about the Great Northwest Day at the Capitol, which was attended by more than 300 people representing 17 communities within the region.

"It is a great annual event," Pearce said. "It is important to participate in that and letting us know how you feel."

Lair said that the event is one that makes a positive impact on legislators.

"It's the one that everyone looks forward to," he said, adding that a Great Northeast Days event was recently started. "Your visit is the one that everyone remembers. It's the one that everyone goes to."

Pearce noted that it is important for communities to work together.

"The days when we compete against each other are over," he said. "If it's good for Trenton, or if it's good for Carrollton, then it's good for Chillicothe. We all have to work together with our limited resources and our talents."

Around 50 people attended Friday's legislative update, which was held at PC's Elkhorn Steakhouse.