tax cut Archives - Missourinet

Gov. Nixon vetoes tax cut bill, offers counters to Republican arguments (VIDEO)

May 1, 2014 By Mike Lear

Governor Jay Nixon (D) has laid made good on his threat to veto tax cut legislation, and says it is the only thing only thing that will prevent Missouri public schools from losing hundreds of millions of dollars.

Governor Jay Nixon (D)

Nixon cites the Missouri School Boards Association finding that Senate Bill 509 would reduce state education funding by $223-million annually. He rejects Republican claims that the triggers in their bill would prevent such losses.

“There’s nothing in here that protects education. Nothing,” Nixon told the Capitol press corps on Thursday. “We had a provision that said let’s guarantee to fund the formula. We put that in that bill. We worked with Senator (Will) Kraus. We put that on the floor of the Senate. They saw what the words were and they made a specific not to include that.”

Nixon also says language in two places in the legislation would result in the eliminating of income taxes on Missourians with annual income of $9,000 or more, thereby wiping out $4.8-billion annually, or 67 percent of the state’s general revenue.

See the Governor’s full statement about his veto of SB 509

Republicans say Nixon could have raised his concerns when he was working with them on early versions of the tax cut. Nixon says they’re trying to shift blame.

“What that statement tells me is they know the bill is drafted in correctly and they’re looking for somebody to blame.”

Republicans will seek to overturn Nixon’s veto early next week after they return to Jefferson City. The effort would begin in the Senate where 23 votes are needed for the necessary two-thirds majority. If the effort is successful there, it would go to the House where 109 votes are needed. GOP leadership in both chambers believe they have the necessary votes.

Lone House Democrat to vote for tax cut still undecided on Nixon arguments

April 29, 2014 By Mike Lear

The only Democrat in the State House who voted for a proposed income tax cut says he still doesn’t know what he thinks of Governor Jay Nixon’s (D) concerns about the proposal.

Representative Jeff Roorda (photo courtesy; Tim Bommel, Missouri House Communications)

Representative Jeff Roorda (D-Barnhart) has had a few days to review the contention of the Nixon Administration that the bill would wipe out $4.8-billion in state revenue by eliminating state taxes for all income beyond $9,000 a year. Republicans say that claim is “laughable.”

Nixon is expected to veto that legislation and legislative Republicans are expected to then attempt to overturn his veto. If all 108 House Republicans vote to overturn they would still need at least one Democrat to vote with them. Since Roorda voted for the bill initially, he is being asked whether he could be that one.

“I’d like to not be in this situation,” says Roorda. “I feel a bit in the spotlight and I certainly didn’t seek the spotlight in this case.”

Roorda says he still wants more information about what the bill would actually do.

“The danger is that because of [the Hancock Amendment] if the courts say [Nixon is] right, you’re eliminating the top bracket through the legislative language, statutory language, we couldn’t fix it over here. “We’d have to go back to the voters,” says Roorda. “Although the bill wouldn’t have taken effect yet with the cuts, it would be enacted and would be a tax increase.”

Roorda thinks the bill does too much for corporations and too little for working people, but says he voted for it because his options are limited as a member of the minority.

“It does do something for working families,” Roorda says.

Roorda says Governor Nixon’s office has been reaching out to him and House Speaker Tim Jones (R-Eureka) hasn’t.

“My vote’s very much in play,” says Roorda.

If Nixon is going to act on the bill he must do so this week. If he does veto it, the decision whether to vote to override might never fall to Roorda. Because it is a Senate bill, the Senate would first take it up to consider an override. 23 votes are needed in the Senate to override a veto. Republicans hold 23 seats in the Senate.

Nixon to discuss actions on proposed tax cut in stops today

April 22, 2014 By Mike Lear

Governor Jay Nixon (D) will make a series of stops in the state today to discuss what he will do with a proposed income tax cut sent to him last week by the state legislature.

Governor Jay Nixon

Nixon’s office issued releases saying he will “discuss his actions on Senate Bill 509,” but it doesn’t say what those actions will be or whether he will execute them today.

Nixon is expected to veto the bill that he has called a “reckless fiscal experiment,” and has said looks much like HB 253 that he vetoed last year. He says the legislation would take $620-million annually from public education and other state programs.

Republicans 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.

Republican legislative leaders say if Nixon vetoes the bill they will attempt to override it before the end of the session May 16.

Nixon will discuss his intentions this morning at the University of Missouri-Kansas City, this afternoon at Missouri State University in Springfield and at his office in the State Capitol, and this evening he will discuss “the impact of Senate Bill 509 on public education” at the Columbia Public School District.

Legislature sends $620-million tax cut proposal to Governor

April 16, 2014 By Mike Lear

The legislature has sent Governor Jay Nixon (D) a proposed $620-million a year cut to income taxes, and Republicans are considering whether enough votes to override a veto are in reach.

House Speaker Tim Jones signs SB 509, the proposed $620-million a year tax cut proposal. (photo courtesy; Tim Bommel, Missouri House Communications)

Nixon has 15 days to act on the bill (SB 509). He could sign it, allow it to become law with no action, or he could veto it as many Republicans anticipate he will.

Nixon called an evening media conference shortly after the House vote and didn’t say he would veto the bill, but hinted at it.

“On its face,” Nixon told reporters, “this year’s reckless fiscal experiment looks an awful lot like last year’s reckless fiscal experiment.”

Nixon vetoed a tax cut proposal last year and 15 House Republicans voted with Democrats to sustain that veto.

104 lawmakers voted for the tax cut proposal Wednesday, with one Democrat siding with Republicans. 109 votes would be needed to overturn a veto and 7 lawmakers were not present for the vote.

Backers say the legislation would let Missourians keep more of their paychecks and that would lead to a stronger economy. Nixon and opponents say the reduction in state revenue threatens state programs and services, particularly education.

The timing of the passage means that if Nixon vetoes it, lawmakers could have a chance to attempt a veto override before the end of the session.

‘Flimsy’ Republicans join caucus leadership ahead of debate of income tax cut (VIDEO)

April 16, 2014 By Mike Lear

11 of the so-called “flimsy 15” stood with House Republican Leaders in an apparent show of caucus solidarity ahead of debate, and likely a vote on, Senate tax cut legislation this afternoon.

The House has taken up Senator Will Kraus’ (R-Lee’s Summit) legislation, SB 509, for possible passage to Governor Jay Nixon (D). It would cut income taxes by one-half percent over several years beginning in 2017. The “flimsy 15” was what a pro-business lobbying group called 15 Republicans who voted with Democrats last year to veto a proposed income tax cut.

One of the most vocal opponents of last year’s bill was Representative Nate Walker (R-Kirksville), who called that legislation “flawed” and said he had to do what was right for his constituents. Walker says he was not coerced to stand with his caucus’ leadership today.

“It was my choice to be there and I support [Kraus’] bill,” Walker tells Missourinet.

He says the lawmakers among that 15, 14 of which are still in the House, met after the veto session and talked to House Republican leadership about their concerns.

“I think this is a good step and I think we need to try this,” Walker says, “and I think the economy will benefit from it.”

“I know why they called us,” says Representative Mike Thomson (R-Maryville), another of the 15. “But we’re a part of the caucus. We always vote our district and our feelings.”

Thomson asks why similar attention hasn’t been paid to Republicans who voted against Right to Work last week in the House. “I don’t know why we were singled out on this to be quite honest.”

House approves two tax cut proposals along party lines

February 21, 2014 By Mike Lear

The state House has passed two proposals for cutting taxes along very similar party-line votes.

Representative T.J. Berry (photo courtesy; Tim Bommel, Missouri House Communications)

The bill sponsored by Representative T.J. Berry (R-Kearney) would cut corporate income taxes in half and allow half of business income reported on personal taxes to be exempted. Legislative researchers estimate the bill would cost the state up to $347-million annually.

Berry says his proposal will spur job creation.

“What House Bill 1253 is about,” Berry tells colleagues, “is incentivizing the creators so that we grow, and when they grow I guarantee you everyone else gets an opportunity also.”

See Rep. Berry’s legislation, HBs 1253 & 1297

Representative Andrew Koenig (photo courtesy; Tim Bommel, Missouri House Communications)

The other bill, sponsored by Representative Andrew Koenig (R-Manchester), would include the exemption for business profits reported as personal income and would cut individual income tax rates along with an exemption for lower-income Missourians. General revenue would have to grow by $100-million to $150-million in order for the cuts to take effect. Legislative projections are that the bill could cost the state up to $703-million by 2021.

“This is a reasoned approach and it will make our state more competitive,” said Koenig.

See Rep. Koenig’s legislation

Every House Democrat present for both votes voted against the proposals.

Representative Margo McNeil (D-Florissant) says testimony during a committee hearing on Berry’s bill indicates Missouri already has a competitive tax policy.

“We had testimony in that committee that said Missouri was the third best state in the nation for corporate income tax. I’ve also heard seventh best. In other words, we already have a pretty good tax rate for corporations in this state.”

McNeil says legislators shouldn’t be pushing tax cuts with other funding needs, such as in mental health, drug rehabilitation centers and education.

She tells lawmakers the foundation formula for K-12 education funding is, “still $550-million under-funded from what, statutorily, we were to be.”

Both bills received 106 votes, well above the 82 required to pass in the House but just shy of the 109 that would be needed to override a gubernatorial veto. Governor Jay Nixon (D) vetoed a tax cut bill last that came down to a close, failed override attempt in the veto session, when 15 Republicans sided with Democrats in voting to sustain that veto.

Governor Nixon issued a statement denouncing the bills as, “fiscally irresponsible experiments that would funnel nearly a billion dollars out of our classrooms and other priorities.”

Both bills have been sent to the Senate.

Nixon vetoes tax bill

June 5, 2013 By [email protected]

Governor Nixon has vetoed a bill that mistakenly would have eliminated the sales tax exemption for prescription drugs. The bill would have provided the first income tax cut for Missourians in decades while also cutting corporate taxes.

Nixon says the income tax cut would have endangered state funding for schools and higher education.

The bill contained a couple of things Nixon asked the legislature to approve at the start of the legislative session–a tax amnesty program and Missouri participation in a multi-state effort to collect sales taxes on internet purchases.

“Therein lies the problem of mashing many concepts together and sticking them in bills,” Nixon said.

In his six-page veto message, Nixon calls the bill “an ill-conceived, fiscally irresponsible experiment that would ineject far-reaching uncertainty into our economy, undermine our state’s fiscal health, and jeopardize basic funding for education and vital ;public services.”

Supporters of the measure said it would allow Missouri to remain competitive with neighboring states, particularly Kansas, that have cut taxes to encourage economic development. However, Nixon pointed to a letter from the Civic Council of Greater Kansas City, an organization of business CEOs, supporting the veto. Council Chairman Donald J. Hall wrote, “Missouri has already drastically cut state services, increasing class sizes, raising college tuitions, and deferring maintenance on Missouri’s roads and bridges. Further tax cuts will only make matters worse, and do nothing to create jobs or make businesses more competitive.”

President Dan Mehan of the Missouri Chamber of Commerce says Nixon’s veto takes away “one of the strongest economic development tools that our state could have put to work.”

Another business group, Associated Industries of Missouri, calls the bill “the kind of common sense tax reduction that Missouri needs to compete with bordering states.”

Hall, in his letter, says the Council believes the bill would “result in significant loss of state general fund revenues and necessitate drastic cuts to funding for education…social services and infrastructure…Tax cuts are not advisable, particularly in light of the state’s inability to adequately fund basic operating needs and services.”

Nixon noted, he has supported other tax cuts in the past.

“We have made targeted tax cuts since I have been governor. On three separate occasions – we got rid of the franchise tax, phasing that out to help small businesses, we put in place a temporary tax deduction for small businesses adding jobs and we are in the process of phasing out the income on military retirees pensions so as the military downsizes, those folks will come to Missouri and start a new career here.”

Supporters of the bill say they will try override Nixon’s action during the September veto session.

Nixon’s veto message: http://governor.mo.gov/newsroom/pdf/2013/HB253veto.pdf