Nixon restricts $400M from budget

Citing opposition to his veto of a House bill last month, Gov. Jay Nixon executed his constitutional authority to restrict $400 million from the fiscal 2014 budget.

House Bill 253 would have instituted phased-in income tax deductions for businesses and individuals. The act would have cut in half the corporate income tax rate during a10-year period to 3.25 percent from 6.25 percent, and dropped the individual income tax rate to 5.5 percent from 6 percent between 2014 and 2018.

Nixon's June 5 veto drew frustration from industry groups, with some legislators, including Springfield Rep. Eric Burlison, threatening to override the veto when the General Assembly reconvenes in September.

“House Bill 253 is a fiscally irresponsible, ill-conceived experiment that would undermine Missouri’s strong fiscal foundation and weaken our economy now, and for years to come,” Nixon said in the release.

He pointed to federal legislation under development dubbed the Marketplace Fairness Act, which would allow state governments to collect taxes from online retailers.

“With a price tag of at least $800 million, House Bill 253 contains flawed provisions that would explode these costs immediately - to the tune of $1.2 billion - if Washington passes the federal Marketplace Fairness Act," Nixon added.

In a statement, House Speaker Tim Jones, R-Eureka, said the governor violated his constitutional authority by restricting the funding after a year with a budget surplus.

“This is nothing more than a politically-motivated stunt that places Missouri families and children at risk by needlessly cutting critical education funding in an attempt to generate controversy over a common-sense tax reduction bill for all Missourians," Jones said.