Governor Jay Nixon (D) says slower-than-anticipated state revenue has caused him to freeze $115.5-million in the state budget for the fiscal year that began Friday. He used the opportunity to urge the legislature not to overturn his vetoes of proposed tax breaks that he says could cost the state even more revenue and lead to more restrictions.
Nixon said revenue did increase in Fiscal Year 2016, just not as quickly as had been projected in creating the budget the legislature passed and he signed.
“That is why in order to protect our shared priorities like public education, college affordability and mental health, a number of new and expanded programs will have to be pared back or put on hold,” said Nixon.
Nixon said one area that stood out in tax collections in FY 16 was corporate taxes.
“Net corporate income tax collections took a nose dive in FY 16, decreasing by 35-percent compared to the previous year. In dollar terms, that’s $150-million less than was collected the year before,” said Nixon.
“That’s why I will also continue to urge members of the General Assembly to sustain my vetoes of unnecessary and unaffordable tax cuts which would require further restrictions in spending if these tax cuts were to become law over my veto,” said Nixon.
Nixon last month vetoed bills that would have tax breaks for businesses who switch to an employee stock ownership plan, and for instructional classes at places like yoga and dance studios, and would have required the state to issue refunds for taxes charged on agricultural disaster payments to farmers. He said those, combined, would cost the state up to nearly $60-million dollars in tax revenue, though some argue that estimate is based on inflated projections of the costs of those bills.