Though the governor said his office would throughly review a tax-cut measure passed by the state General Assembly, Jay Nixon criticized the bill passed to his desk this week.
Senate Bill 509 would gradually reduce the state's individual income tax rate to 5.5 percent from 6 percent and phase in a 25 percent deduction on an individual's business income. If approved, the changes would take effect in 2017, according to the bill's summary page on
Senate.Mo.Gov.
The House yesterday approved the legislation by a 104-48 vote.
In a news conference yesterday evening, Nixon called the bill a "reckless fiscal experiment,"
nearly identical to concerns he expressed about a similar bill during the 2013 session.
“Once again, supporters of this fiscally irresponsible scheme are trotting out discredited economic theories and excuses," Nixon said yesterday, noting Missouri has the sixth-lowest taxes in the U.S. “And once again, the General Assembly has voted to take money out of our public schools – hundreds of millions a year – and give it to some folks who don’t need it."
The bill, Nixon said, would take $620 million annually from public education and other sources.
Proponents of the bill, such as the Missouri Chamber of Commerce and Industry, say the legislation would give the Show-Me State a competitive tool.
"Six of the eight states bordering Missouri have made moves to cut taxes. Eighteen states cut taxes last year alone,” Missouri chamber President and CEO Dan Mehan said in a news release. “We are being left behind. In a decade, we definitely will see the difference in the economies of those states that have established aggressive tax policy and those states that stood still.”
Addressing the notion the bill would take money away from schools, Mehan said the argument was misguided.
“The proposal includes important protections for the state, should the economy falter. The tax cuts would begin in 2017, but only if Missouri's net general revenues rise by $150 million over the highest level across the previous three years," he said in the release.
Last year, Nixon vetoed a bill seeking to introduce incremental tax reductions during a 10-year period, cut in half the corporate income tax rate and drop individual income taxes to 5.5 percent from 6 percent between 2014 and 2018. The hotly contested bill ultimately failed a veto override in a special session in the fall, according to
Springfield Business Journal archives.
