The Missouri House Ways and Means Committee voted Monday in Jefferson City to approve major tax reform legislation, which includes funding for Missouri’s deteriorating roads and bridges.
House Speaker Pro Tem Elijah Haahr’s bill was approved by the Ways and Means Committee 6-3 in a party line vote on Monday, with Republicans for and Democrats against.
Haahr, R-Springfield, testifies his bill would put Missouri in line with some other states by indexing vehicle user fees to the cost of inflation.
“There was some concern about indexing user fees every three years after the initial time, basically binding the hands of future (Missouri) legislators, so we removed the every three years component, we just do it the one time,” Haahr testifies.
Haahr says that change will generate about $174 million annually for the state’s road fund, along with $58 million annually for counties.
Haahr testified in-detail about the transportation provision last week, noting that Missouri’s vehicle license and registration fees were put in statute in 1984 and haven’t changed in more than 30 years.
Haahr says the 429-page bill will transform Missouri’s tax system to the most competitive in the nation. The bill cuts Missouri’s personal and corporate income tax rates.
He notes several business groups and organizations testified for the bill at last week’s hearing.
“Missouri Chamber of Commerce, South Kansas City Chamber of Commerce, St. Louis Regional Chamber of Commerce, a variety of construction and contract companies that would like to see us build more infrastructure in the state,” says Haahr.
The Missouri Limestone Producers Association also testified for the bill, saying its transportation provision is a start for Missouri.
The Haahr legislation would reduce Missouri’s highest personal income tax rate from 5.9 to five percent. It also would reduce Missouri’s corporate income tax from 6.25 to five percent.
The 6-3 committee vote was along party lines, with State Reps. Brandon Ellington, D-Kansas City, Richard Brown, D-Kansas City and Jay Mosley, D-Florissant, voting no.
Ellington, the committee’s ranking Democrat, voted against the bill after his amendment to protect the senior citizen property tax credit for renters was defeated on a party-line vote.
“It’s a shame we couldn’t protect our most vulnerable citizens when we’re balancing our budget off of their backs,” Ellington says.
Ellington tells Missourinet he would have voted to send Haahr’s bill to the House floor, had his amendment to preserve the “circuit breaker” for seniors who rent passed.
“We’re (the House) balancing our budget going off of a tax credit that typically is expended at about $535,” says Ellington. “So we’re not talking about individuals using a lot of money and we’re talking about older folks. These are folks that have worked their entire lives and if they were financially stable they wouldn’t be renting.”
Missouri’s circuit breaker is a senior citizen property tax credit, and Ellington says there are more renters who use the circuit breaker than owners.
Pro Tem Haahr testifies the circuit breaker was established to help people pay their property taxes, adding that renters don’t pay property taxes.
Haahr told Representatives Ellington and Brown last week that the bill contains $40 million for the Missouri Senior Services Protection Fund, which Haahr says would assist those residents.
House Speaker Todd Richardson, R-Poplar Bluff, told the Capitol Press Corps on Thursday that the House is focused on trying to create the most competitive economic environment for Missouri.