First, Governor Nixon has issued a statement.
âMissouri families and businesses know that public education is the best economic development tool there is, and that is why I vetoed Senate Bill 509,â Gov. Nixon said. âWhile scaled back from last yearâs billion-dollar House Bill 253, Senate Bill 509 fails to prioritize or adequately protect public education at a time when quality public schools are more important than ever to our ability to create jobs in the global economy. And while its authors may have delayed its impact, Senate Bill 509 remains a very real threat to the principles of fiscal discipline that have helped us maintain our spotless AAA rating for decades. As I have from Day One, I will continue to manage the budget with the resources available and keep our state moving forward.âhttp://governor.mo.gov/...
Missouri, who's economy has been growing faster than many nearby peers, and has become a target site for more construction than it's neighbors still thought that the Kansas plan might be best for them.
This plan, which includes significant cuts in overall income tax, will help middle class and poor families... oh, wait, it basically won't. Meanwhile, with no offset it pushes more spending back onto counties and municipalities who will have to make up the slack.
JEFFERSON CITY, Mo. â Missouri House Republicans erupted into applause on Tuesday when they were joined by one lone Democrat to override Democratic Gov. Jay Nixonâs veto of Senate Bill 509, a $620 million tax cut for businesses and individuals.In many ways, several had referred to this as a non-taxcut cut.. In order to go into effect, they said, you'd have to show that the economy was growing before it could kick in for 2017 (2016 reporting cycle).
With the support of Rep. Keith English, D-Florissant, lawmakers struck Nixon with perhaps the largest blow of his second term: A loss on a tax cut.
When enacted, the new law will reduce the maximum tax rate on personal income from 6 to 5.5 percent beginning in 2017 and allow a 25 percent deduction of business income on personal tax returns. Both provisions would be contingent on state revenues being $150 million higher than the highest of the three previous years.
Rep. Judy Morgan explains the issue:
Yep, you heard her right. Depending on how you read the text, several outsiders believe this could create a monumental reporting hole which isn't contingent on the uptick in state revenues. How big of a hole? Somewhere around $4B (yes, $4 BILLION).
Republicans have largely dismissed this, noting that this analysis leaves out self-owned businesses and small businesses which already report taxes and would be impacted by the triggers.
Still, without a consistent scoring, it is impossible to know the impact.
The real question is: when you have a state economy performing better than your neighboring peers, why would you suddenly ditch your policy to adopt a failed one from a neighbor?
It reminds me of this:
Welp, welcome aboard Missouri.