Governor plans 2 SWMO stops today

Gov. Jay Nixon is traveling to southwest Missouri today to announce a multimillion-dollar expansion at a Carthage manufacturer and to discuss his veto of a hotly debated tax cut bill.

Leggett & Platt expansion

Leggett & Platt Inc. (NYSE: LEG) and Carthage officials joined Nixon this morning to reveal a $5.1 million expansion at the manufacturer’s automobile seating components plant. Leggett & Platt’s Flex-O-Lators facilityis adding 28,000 square feet and hiring 12 workers.

“This Flex-O-Lators facility is critical to Leggett & Platt’s growth in the highly competitive global automotive industry,” CEO and board chairman David S. Haffnersaid in a news release. “Leggett & Platt began in Missouri and we want to grow here.”

The 130-year-old manufacturer of components in the home furnishings and fixtures industries operates 130 plants and employs 18,000 across 17 countries. The release said Leggett & Platt would qualify for an incentives package through the state Department of Economic Development should the company meet its job creation and investment goals.

During the expansion announcement, Nixon recognized Leggett & Platt with a Flag of Freedom award for hiring veterans through the Show-Me Heroes program. The company employs 69 veterans in Missouri, the release said.

“Leggett & Platt is another made-in-Missouri success story,” Nixon said in the release. “Over the past five years, we’ve kept Missouri a low tax state and made targeted investments in our workforce to grow our economy and help businesses succeed.”

State officials pointed to several recent expansion announcements by Missouri manufacturers, including Holland 1916 in Liberty, CertainTeed Corp. in Jonesburg, Staying Home Corp. in Harrisonville and Noranda Aluminum Holding Corp. in New Madrid.

Tax cut debate

Nixon also will travel to Bolivar for a 3:15 p.m. visit at Stephens Pharmacy, 1100 S. Springfield Ave., to discuss the impact of House Bill 253, which he has said amounts to a $200 million tax increase on prescription drugs and also would cost school districts statewide. Nixon vetoed the legislation in June, and some lawmakers and industry associations have called for an override during next month’s veto session.

The bill proposes a phased-in reduction of Missouri’s income tax rate to 5.5 percent from 6 percent, and the proposal’s fate is now in the hands of the general assembly when legislators begin the veto session Sept. 11. Key features of the bill include incremental reductions during a 10-year period and only in years following a tax revenue increase of at least $100 million.

A fiscal note on the bill estimates the tax reduction would cost the state between $492 million and $692 million in the next decade. In his veto statement, Nixon said the bill is “an ill-conceived, fiscally irresponsible experiment that would inject far-reaching uncertainty into our economy, undermine our state’s fiscal health and jeopardize basic funding for education and vital public services.”

This month, Nixon has traveled the state speaking to drug store owners and school groups about how the proposed tax cuts would raise taxes on prescriptions and force cuts to education. Yesterday at a pharmacy in Kirkwood, Nixon said the bill would repeal a state sales tax exemption for prescription drugs and co-payments on the books since 1979. He said given local jurisdictions follow state laws regarding exemptions, prescription purchases also would be subject to local sales taxes, raising consumer costs by as much as 10 percent in some communities.

In response to Nixon’s assessments, the Taxpayers Research Institute of Missouri yesterday released research showing HB 253 would reduce the state’s $339 million fiscal 2014 surplus by only $50 million – an amount based on reduced collections of personal income taxes, an estimated $45 million, and corporate income taxes, $4.97 million.

Veto supporters, which include the Springfield Board of Education and the Coalition for Missouri’s Future, project higher state revenue losses pending passage of the federal Marketplace Fairness Act, which they say would allow Missouri taxpayers to seek refunds for three tax years prior to 2014. Officials at the Taxpayers Research Institute have said such retroactive refunds would be unconstitutional, citing laws passed in 1990 and 2012 where specific provisions for retroactive tax legislation were halted by the Department of Revenue due to constitutional concerns.

“The numbers being used on the other side of this debate simply don’t add up,” TRIM Executive Director Ray McCarty said in a news release. “They are using a worst-case scenario times three – and an unconstitutional scenario at that.”

This morning, Missouri House Speaker Tim Jones, R-Eureka, asked Attorney General Chris Koster to provide his legal opinion on Nixon’s claims of retroactive tax refunds of roughly $900 million. Jones cited a memorandum from the General Assembly’s Legislative Research Department that refutes retroactive income tax reductions.

Nixon also discussed the matter last week in Springfield, meeting with public school officials on the heels of the Boardof Education passing a resolution that urges the General Assembly to sustain the governor’s veto.

According to the Nixon administration, full implementation of the state tax cuts could cost the Springfield district $4.3 million to $7.5 million a year, pending a congressional vote on the Federal Marketplace Fairness Act. The school district in Nixa could lose an estimated $2 million to $3.5 million, and Branson schools could lose $800,000 to $1.3 million, according to data provided by the governor’s office to the Missouri Association of School Administrators.[[In-content Ad]]