Nicola and McCarty address COST Annual Meeting in San Antonio
October 1, 2026 - Last week, State Senator Joe Nicola and Associated Industries of Missouri (AIM) president and CEO Ray McCarty spoke at the 57th Annual Meeting of the Council on State Taxation (COST) in San Antonio, Texas.
McCarty joined tax leaders from Illinois, Iowa, Indiana, Minnesota and Ohio in a panel discussion of significant tax and state budget issues moderated by Fred Nicely, Council on State Taxation.
McCarty said a $1 billion revenue shortfall in the Missouri FY 27 state budget absorbed the balance in the General Revenue Fund after years of being supported by COVID and other federal funds. He said the budget that will be crafted in the upcoming 2027 legislative session for FY 28 will require legislators to deal with an estimated $500 million shortfall, presumably through budget cuts. McCarty pointed out the budget situation means he and other taxpayer advocates must work to protect current tax benefits as the state looks for ways to generate more revenue and lessen the pain of those budget cuts.
McCarty also told attendees that AIM's Taxpayers Research Institute of Missouri published a report showing no direct cause and effect relationship on state Gross Domestic Product (GDP) if a state eliminates a state income tax and simultaneously raises and expands the base of its sales and use taxes. Such a tax swap proposal was rejected by Missouri voters 83% - 17% even though it was a top priority of Missouri Republicans in the 2026 Legislative Session. "Pure income tax elimination may increase state GDP, but not a swap of one tax for another - especially one that increases a burden on consumption of goods and services," he said. McCarty applauded Senator Joe Nicola for his strong stance against the proposal as it passed through the Missouri Senate.
Senator Nicola was invited to join a panel of legislators to discuss hot tax issues. He was joined by Rep. Aisha Gomez (D) from Minnesota and Rep. Adam Smith (R) from Kansas and the panel was moderated by Jim Eads of Ryan.
Senator Nicola also discussed the plan to replace income taxes with increased and expanded sales taxes and his opposition to that particular plan, while he expressed his support for a responsible plan that reduces the income tax rate using the growth of state revenues.
"Missouri statutes currently reduce state income tax rates using growth in state revenues," said Senator Nicola. "We have reduced our top state income tax rate from 6% to 4.7% under existing Missouri law and it could be reduced even further to 4.5% under current law. I will be working with my colleagues to remove that 'floor' and allow the rate to go even lower, reducing the tax burden on Missourians in a responsible way."
Senator Nicola also said property taxes were causing the most pain for Missouri taxpayers, particularly in his home county of Jackson County, and he would continue to advocate for responsible taxpayer protections against skyrocketing property taxes that burden Missouri homeowners and businesses.
The event was attended by more than 200 tax professionals from across the nation.
"I want to thank the COST leadership for inviting Sen. Nicola and me to speak at this important annual meeting," said McCarty. "We look forward to continuing to work with COST in the future."
