Revenue figures make the argument; legislature should override HB 253 veto
The facts speak for themselves, and Associated Industries of Missouri continues to encourage the Missouri legislature to override Governor Jay Nixon’s veto of the first broad-based tax cut in Missouri since the 1920’s.
Missouri tax revenues beat anticipated collections at the end of the fiscal year by $339 million, with tax receipts $740 million more than the previous year. This money should carry forward into the state’s FY 2014 budget year.
According to official cost calculations, the tax cut bill would cost about $50 million in FY 2014, if the federal Marketplace Fairness Act is not passed by Congress. If that Act is passed by Congress, this amount would grow, but only to $246 million. Costs in future years would be paid for through growth in tax revenues and several key funding increases originally supported by the Nixon administration.
If the state has a surplus that will carry into the FY 2014 fiscal year to help offset this cost, why is the Governor withholding $400 million from vital state services like education? In fact, the withholdings to education are about $115 million of this $400 million. If the state is able to carry forward at least $165 million from the current fiscal year, this would completely fund these appropriations and the tax cut for FY 2014. There should be no financial need for the Governor to withhold money from education.
“The governor and budget director say they want to put the budget surplus into reserve and rainy day accounts. That’s fine,” said AIM president Ray McCarty. “The tax cut, even if the Marketplace Fairness Act does pass, still allows for a healthy transfer into reserve funds. It certainly does not explain why the governor would withhold more than $150 million from public education.”
McCarty says history is repeating itself. Governor Bob Holden withheld money from education when the Republican controlled legislature rejected his call for tax increases in 2004. He was eventually forced to release the funding when state revenues proved sufficient to fund the budget without the tax increases. Linda Luebbering, the current budget director, was also the budget director in 2004 when Governor Holden took this action.
“It is interesting Governor Jay Nixon seems to be following this same course of action because he disagrees with the tax cut passed by the legislature,” said McCarty.
This tax cut is a responsible way to allow ALL Missouri taxpayers to keep a portion of the taxes they are now sending to Jefferson City and reinvest that money in purchases, jobs, and salaries. Growth in the economy is sure to result. Our state and local economic development professionals will be able to use this tax cut to attract new businesses and help our existing businesses expand, creating more tax revenues to fund education and other vital state services.
“Associated Industries of Missouri is confident when people understand the real facts around the tax cut, they will reject the political posturing that is too common these days and understand this tax cut is important for Missouri taxpayers, the educational community, and the overall economy of Missouri,” said McCarty.