The top issue in September’s veto session at the statehouse likely will be a bill that phases in an income tax cut. The issue has Republicans and Democrats seeing completely opposite outcomes.
Gov. Jay Nixon vetoed the bill in June, and has toured the state bolstering that veto on grounds that it will devastate education and raise the cost of prescription drugs. Supporters say it will actually bolster revenue, and they vow to fix the prescription drug issue.
The governor backs up his statements with numbers, and recently brought his budget director to St. Joseph to lay out some of the startling figures: the St. Joseph School District stands to lose up to $6 million; higher education could be impacted by as much as $116 million; and the general revenue of the state will lose as much as $1.2 billion.
But talk to a supporter of House Bill 253 and you’ll get a completely different set of numbers. Rep. Casey Guersney, R-Bethany, said the governor is doling out arguments that are without fact, that he’s simplified the entire scenario and ignores key provisions of the bill.
Mr. Guernsey said the bill has provisions that won’t allow tax cuts to move forward unless revenues reach a certain level, and they’re phased in over a period of 10 years.
“We believe so strongly that it will be a generator of revenue for the state that we’re willing to put those benchmarks in there,” Mr. Guernsey said.
Questioning the numbers
Mr. Nixon withheld $400 million in appropriations because of the possibility that the legislature, which has a veto-proof majority in the House, would overturn his veto and negatively affect revenues.
Rep. Mike Lair, R-Chillicothe, is active in education matters at the statehouse and chairs the Appropriations–Education Committee. He also serves on the Joint Committee on Education and the Interim Committee on Education. The threat of the budget for education being gutted by the effects of HB253 barely raises an eyebrow of interest from Mr. Lair.
“If the governor’s numbers were true, I would definitely vote to override,” he said. “But they’re not true.”
The governor’s office has released a list of what each school district stands to lose if his veto is overridden. Mr. Lair said releasing those stats to the school superintendents is simply “scare tactics. That’s all it is.”
Mr. Lair asks why the governor went immediately to education for the withhold.
“You’re the ‘education governor,’” he said. “Why not go to some of the social programs? Why go to education and hold education hostage?”
Mr. Nixon said Wednesday in his comments to educators and community members at the Troester Media Center that HB253 offers tax breaks to specific types of businesses, including law firms and lobbyists.
“Under this bill,” Mr. Nixon said, “a lobbyist with $500,000 in business income can claim an exemption of $2,400, while a family making $48,000 gets about $6.”
The governor also said that the state can’t build an economy on special breaks.
“Those are not going to create jobs,” he said. “I don’t know which state is building their economy by trying to attract the most lawyers possible.”
Mr. Guernsey countered that all businesses in Missouri would receive a tax break of 10 percent in the first year of the plan.
“The governor is trying to use political buzzwords to poke holes in the tax cuts,” he said. “In order for it to be phased in incrementally every year, the proof has to be in the numbers. Our revenue for the next year has to show there was a net gain of at least $100 million.”
Mr. Nixon said lawmakers aren’t able to read every bill that passes in the last week of the General Assembly, and probably did not agree with the provision that ends a prescription drug program that will raise the amount Missourians spend on medication by about $200 million a year. The bill also affects textbooks, which will no longer be tax-exempt.
Mr. Guernsey said if none of his colleagues in the House prefiles a bill in December to fix those problems with HB253, he would.