Missouri’s executive and legislative branches have drawn to a standoff over tax policy, with neither side offering to budge in their stances.
A sampling of Republican lawmakers from Northwest Missouri revealed a unified stand for the tax plan, which was sent to Gov. Jay Nixon’s desk on April 16. It sets the stage for a likely veto by the governor that would then face a legislative vote for an override.
Mr. Nixon, a Democrat, held a conference call in Kansas City with state newspapers to outline his opposition to a Senate plan to slash business and individual income taxes. Senators last week voted to approve a measure to cut state income taxes by an estimated $620 million annually through phase-ins that would start in 2017.
The governor said he has a “major problem” with a provision that seeks to eliminate income tax for Missourians with annual incomes of more than $9,000. He said the idea would eradicate the top tax bracket and remove 97 percent of all individual tax collections. He labeled the potential consequences for public services like education as “cataclysmic.”
“The results were staggering,” Mr. Nixon said, referring to two studies of impacts that included a fiscal analysis by the state budget office. According to the governor, the outcomes would devastate the economy and include teacher layoffs, prison closings and cuts to mental-health programs.
“It’s a doomsday scenario,” he told the newspapers. “This is extremely problematic.”
He called the bill a failure for its lack of garnering debate before it passed the Missouri General Assembly, and added he is not a fan of “experimental” large tax cuts. The state already has the distinction, he said, of being the sixth-lowest taxed in the nation. Tax cuts signed earlier in his administration were targeted to stimulate economic development, he said.
Faced with the prospect of a veto override, Mr. Nixon said he hopes lawmakers would reconsider their views.
“They should admit they made a big mistake,” he said.
Rather than move to a consensus, the region’s majority Republican statehouse delegation instead hardened its reaction to Mr. Nixon’s disapproval. Rep. Delus Johnson, R-St. Joseph, told the News-Press he’s discovered 18 states have either completely eliminated or reduced their corporate income taxes.
“We’re bleeding businesses out of this state,” he said. “This bill is a revenue accelerator ... We are getting massive support.”
The fiscal 2015 budget still will fully fund the foundation formula for education, Mr. Johnson said.
“We are funding education at record levels,” he said, adding he believes Mr. Nixon’s statements are only threats.
Rep. Casey Guernsey, R-Bethany, said a veto would destroy Missouri’s first attempt at major tax reform in a century.
“There’s no facts involved,” he said of the governor’s criticism.
Rep. Mike Lair, R-Chillicothe, said Mr. Nixon was resorting to “scare tactics” on education reductions in a manner consistent with the battle fought during the 2013 session.
“I do think it’s a better tax bill,” said Mr. Lair, a former teacher who added he would never vote for a measure that costs schools “one dime.”
Rep. Galen Higdon, R-St. Joseph, said Mr. Nixon was promoting “misinformation” on the tax plan.
“That’s just not true,” he said of the governor’s vow to cut education.
Rep. Dr. Jim Neely, R-Cameron; and Sen. Dr. Rob Schaaf, R-St. Joseph, both said the measure is worthwhile.
“I think we passed a good bill that helps all Missourians,” Dr. Schaaf said.
Sen. Brad Lager, R-Savannah, said the plan represents a “modest” tax cut that will be phased in as economic growth occurs.
“There are safeguards and triggers in the bill to protect against massive government cuts while staying true to the principles of allowing Missouri’s hard-working citizens to keep more of their own money,” Mr. Lager said.
The delegation’s lone Democrat, Rep. Pat Conway of St. Joseph, said the tax cuts are misdirected and should rather allow for more legislative study.
“Let’s turn that around and give it to the people who are going to spend it,” he said. “We’re still struggling to fund education.”