Governor Jay Nixon (D) has announced he will veto a proposed tax cut, SB 509. Nixon had foreshadowed that action since the legislation was passed by the legislature two weeks ago.
Nixon calls the bill an “unaffordable, unfair and dangerous scheme.” He cites the legislature’s fiscal estimate that says it would reduce state revenues by more than $620-million annually when fully implemented. His administration maintains the bill also would eliminate the state income tax for all Missourians with more than $9,000 of annual income, thereby eliminating more than $4.8-billion in annual state revenue.
House Republicans have dismissed the Governor’s concern about the elimination of income taxes as “laughable” and a “deception.” They say the bill’s tax cuts would only be triggered in a year after net general revenue increases by at least $150-million.
The proposal would reduce the top personal income tax rate of 6-percent to 5.5-percent by 1/10 of a percent annually beginning in 2017 if state general revenue continues growth. The bill would also phase in a 25-percent individual income tax deduction for business income.
Legislative Republicans will try to override Nixon’s veto. That attempt would begin in the Senate where 23 votes would be needed to overturn the Governor. If successful there, would go to the House where 109 votes are needed.
Republicans hold 108 seats in the House and Republican majority leadership has expressed confidence that all 108 will vote for the override. One Democrat voted for the tax cut bill in the House, Representative Jeff Roorda (D-Barnhart). He told Missourinet this week he isn’t sure where he stands on all the Governor’s arguments and says his vote is “still in play.”