May 25, 2013

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New House tax deduction hits wall in Senate

May 7, 2013 By

A plan to give buyers of new homes an income tax deduction has been sidetracked by senators who say state government should not meddle in the real estate market.

The House has approved a bill allowing buyers of new homes a tax deduction equal to two percent of the price of the newly-built home.  The most anybody could deduct would be $10,000—two percent of a half-million dollar house’s price.

Backers think the deduction will pump life into the realtor business that has had high unemployment during the recession.

But St. Joseph Senator Rob Schaaf says the bill is unfair to people wanting to sell homes. “If I’m a person who has a home for sale you’re taking some of my potential customers out of the marketplace,” he says.

Another senator joins Schaaf, maintaining the free market will solve problems for realtors, and prices, not tax deductions, will determine who buys what house.

The senate sponsor of the billl has been forced to put the bill aside because of lack of time for further debate.

AUDIO: debate 27:00

Filed Under: Economy, Human Interest, News

House version of tax reform legislation passed

April 25, 2013 By

The House has passed its version of legislation Republicans hope will level the playing field for Missouri among neighboring states. The proposal would cut income taxes for individuals and businesses will increasing the state sales tax.

Representative Andrew Koenig (photo courtesy; Missouri House Communications)

Representative Andrew Koenig (photo courtesy; Missouri House Communications)

Estimates from legislative researchers say the plan would eventually cut state revenue by $438 million annually. The changes wouldn’t kick in unless state revenue collections grow by at least $100 million year-to-year.

See the legislation, SB 26.

Representative Judy Morgan (D-Kansas City) and other Democrats say the bill will hurt the poor by shifting the tax burden.

“The reduction of the personal and corporate and business income tax, increase of the sales tax, guess who’s going to benefit from that. Not the people that make less than $33,000 a year. They will pay more in taxes because of the sales taxes and the people who will benefit will be millionaires.”

The House handler of the bill, Representative Andrew Koenig (R-Manchester) says the claims the bill will hurt the poor are “false” and “scare tactics.”

“In this bill there’s a $2000 deduction on income tax. We have a sales tax code that is laced with exemptions on the basic necessities of life … on food, gasoline, mortgage, rent, etcetera.”

The plan would cut the top personal income tax rate by two-thirds of a percent over five years. The corporate income tax would be gradually reduced by three-quarters of a percent, while a new 50 percent deduction would be phased in for business income reported on owners’ individual tax returns.

Personal deductions on individual income taxes for those with incomes under $20,000 annually would nearly double and the first $25,000 of corporate income from taxation would be exempted.

The sales tax would be gradually increased by three-fifths of a cent to pay for roads and education. The plan would set aside part of that increase to pay to replace the Missouri State Mental Hospital in Fulton. An amendment added on the House floor would also send part of the increase in sales revenue to the state’s schools.

The House version of the plan includes tax amnesty language that its budget writers and Governor Jay Nixon assume the passage of to balance their budget proposals.

The package passed the House 90-68, well short of the support needed to overturn a veto by the Governor who has opposed an earlier version of the bill. 19 Republicans voted with Democrats against it.

It goes back to the Senate.

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Department of Elementary and Secondary Education says budget shortfall is not where it should be (AUDIO)

April 16, 2013 By

Deputy Commissioner Ron Lankford with the Department of Elementary and Secondary Education says the state revenue is increasing, but is still about $1 billion short of where its budget needs to be, and has been that way in past years; compared to before the economic crisis.

He says since 2008, Missouri has been seeing a gradual increase in its revenue, but Lankford says that’s not enough. “What we really want to establish is that there is no intent in this particular presentation, and to be critical of the Missouri General Assembly,” he said. “Nor is there any intent to be critical of the realities of what has happened at the federal government level.”

Lankford says the budget that’s available is the limitation of what can be dispersed on a state level and says the department can’t deficit spend in Missouri. “I really am glad that I’m not the one that has to navigate and work through what they have had to work through in the Capitol building as far as those who put together the budget and those who have to cast the vote for the budget,” he said.

The Department says the shortfall for fiscal year 2014 is at $1.4 million and another $400,000 for fiscal year 2015. The total shortfall in the next two years is estimated at $1.9 million.

He says in the last 18 months, the department has been trying to get a better handle on moving forward with federal streams of revenue that impact the department of education.

 

AUDIO: Mary Farucci reports. (1:04)

 

 

 

 

Filed Under: Economy, Education, Featured, News

Department of Economic Development releases state jobs report; sees positive trend for February (AUDIO)

March 20, 2013 By

The Department of Economic Development has released the state job report for February and employment continues to rise. They say for the 42nd consecutive month, Missouri continues to remain below the national unemployment rate.

The state’s payrolls increased by nearly 4,000 jobs and employment growth has been led by the construction industry which is up 4,500 jobs. Spokesman Joh Fougere says while the state and the nation as a whole has worked its way out of the national recession from 2008 to 2009, Missouri’s decreasing unemployment rate has been better off than the rest of the nation.

“There are some very good signs out there that we continue to see the momentum we’re seeing. Our manufacturing is coming back strongly in the state led by the auto industry,” he said. “Ford and General Motors are in the midst of major expansions at their respective plants in Claycomo and Wentzville.”

 Missouri’s unemployment rate has fallen nearly three full points since its peak in August 2009. “We worked our way out of the national recession and that’s positive, and we’ll continue to watch those trends closely to see if they continue,” Fougere said.

He says Missouri’s unemployment rate has now been lower than the national unemployment rate for 42 consecutive months. Fougere says to put that number in proper perspective, during the four year period between 2005 and 2009, Missouri’s unemployment rate was lower than the national unemployment rate for 4 months out of those 4 years.

The national unemployment rate for February was 7.7 percent. Missouri’s unemployment rate for the month stood at 6.7 percent.

 

AUDIO: Mary Farucci reports. (1:02)

Filed Under: Economy, Featured, News

House Budget Committee approves $24.7 billion budget

March 13, 2013 By

The House Appropriations Committee has passed a proposed $24.7 billion budget for the fiscal year beginning July 1, and it does not include Medicaid eligibility expansion.

Representative Rick Stream (R-Kirkwood) chairs the House Appropriations Committee. (photo courtesy; Tim Bommel, Missouri House Communications)

Representative Rick Stream (R-Kirkwood) chairs the House Appropriations Committee. (photo courtesy; Tim Bommel, Missouri House Communications)

The Committee rejected two amendments that would have reinserted federal dollars and projected revenue and savings tied to Medicaid expansion in the House budget proposal.

Representative Caleb Rowden (R-Columbia) says the state won’t be able to sustain an expanded Medicaid program without cutting into other areas.

“We get out to 2020 when we become on the hook for some of this stuff, it is still my opinion that we’re going to have to pillage education funding to get to the point where we can make this work. For that reason and that reason alone I would be inclined to not support the amendment.”

Representative Jill Schupp (D-Creve Coeur) urged the Committee to let the full House chamber weigh in.

“We have an opportunity here to not only expand service but to provide an opportunity for more than 24,000 jobs to be created in the first year alone, to bring money into Missouri that would not otherwise be here and to help develop and build our economy.”

The amendments would have plugged in $46 million in projected savings and revenue and more than $800 million to pay for eligibility expansion. Both were defeated along party lines.

The Committee has put money in place to temporarily fill a gap left by the federal sequester cuts, to fund scholarships for National Guard members. Money pulled from several other places will fund the $2.5 million Show-Me Heroes fund.

Representative Jeff Grisamore (R-Lee’s Summit) says it was important not to leave National Guard soldiers behind.

“We will know possibly by the end of the month if there will be a continuing resolution in Congress that would possibly restore this federal side of tuition assistance for National Guard, but if the cuts of the sequester stick, we want to step up and assist and offset that loss so we can ensure that our student soldiers continue to have the funding they need to further their higher education.”

The Committee also voted to pull $85,000 from the administration of the Department of Revenue. That amendment was sponsored by Representative Robert Ross (R-Yukon), who says he is not satisfied with the Department’s response to questions about its scanning and retention of personal information from Missouri driver’s license and concealed carry permit applicants.

Ross withdrew another amendment that would have taken $3-million from the Department.

The budget proposal will go to the full House for debate when lawmakers return from Spring Break.

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