Missouri Lawmakers Override Veto, Enact Tax Cut

5 years 7 months 13 hours ago Tuesday, May 06 2014 May 6, 2014 Tuesday, May 06, 2014 9:48:00 AM CDT May 06, 2014 in News
By: The Associated Press

JEFFERSON CITY (AP) - Missouri's Republican-led Legislature enacted the state's first income tax rate reduction in almost a century Tuesday by overriding the veto of Democratic Gov. Jay Nixon, who has denounced it as a reckless financial experiment.

The new law will gradually cut Missouri's top individual income tax rate starting in 2017 and make the state just the third in the nation to offer a special business-income deduction on personal tax returns. But the incremental tax cuts will occur only if Missouri's revenues keep growing.

The tax cuts could benefit about 2.5 million individuals and families, with the wealthiest standing to gain the most, and would provide an extra boost to hundreds of thousands of people involved in business partnerships, limited liability corporations or their own ventures.

The override vote capped an intense, multi-year campaign that included millions of dollars of advertising by tax-cut supporters and scores of opposition events across the state organized by Nixon. Republicans made the tax cut a priority for 2014 after failing last year to override Nixon's veto of a more complex and expansive tax cut.

The GOP holds large majorities in both chambers but needed a little Democratic help to accomplish the two-thirds vote needed to override this year's veto. The House voted 109-46 to enact the tax cut, with Democratic Rep. Keith English of suburban St. Louis joining all 108 Republicans. The GOP-led Senate voted Monday to override the veto on a party-line 23-8 vote.

Republicans cheered and House Majority Leader John Diehl raised his arms in victory as the override vote passed.

"The income tax is destructive toward economic growth," said Rep. Andrew Koenig, of suburban St. Louis, who handled the bill. "It is time for Missouri to cut the income tax."

Like their colleagues in other states, Missouri Republicans touted that tax cut as means of remaining competitive with their neighbors and boosting the economy as revenues rebound from the Great Recession. But the tax-cutting trend has not been limited to Republican states. About a dozen states passed income tax cuts last year and at least half that many already have voted to cut income taxes this year, including Democratic-led New York and Republican-led Oklahoma.

While vetoing the Missouri measure, Nixon had raised concerns that it could jeopardize funding for essential state services while providing a much larger benefit to the rich than the poor. He described it as "an unfair, unaffordable and dangerous scheme that would defund our schools, weaken our economy, and destabilize the strong foundation of fiscal discipline" in Missouri.

Economists at the University of Missouri-Columbia have estimated that the tax cut will eventually reduce state revenues by $620 million annually. But Nixon asserted it could punch a $4.8 billion annual hole in the state budget. He contends the bill's wording could be interpreted to eliminate taxes on all income over $9,000, though Republican legislative leaders have called that "laughable" and "absurd."

The new law is designed to gradually reduce Missouri's top individual income tax rate - currently charged on all income over $9,000 - from 6 percent to 5.5 percent. It also phases in a new 25 percent deduction for business income reported on personal tax returns. Each incremental cut would occur only if state revenues grow by at least $150 million over their high mark from the previous three years.

The legislation also would increase a tax deduction for low-income residents and make annual adjustments to Missouri's tax brackets based on inflation, which could effectively result in perpetual tax cuts.

Republican supporters tout the revenue trigger as an important safeguard that will ensure Missouri's budget keeps growing despite the tax cuts. But had the law been in place, a revenue increase in the 2008 fiscal year would have caused a tax cut to occur in 2009 as state revenues plummeted as a result of the recession.

Missouri's tax cut is a less aggressive version of measures recently enacted in Kansas, which lowered its top tax rate and fully exempted certain categories of businesses from taxes.

Last week, Moody's Investors Service downgraded Kansas' credit rating, noting its sluggish economic recovery compared with other states. Kansas revenues declined in April. Among other things, Moody's said the income tax cuts were putting pressure on the budget and creating risk for the state's financial future.

 

More News

Grid
List
COLUMBIA - Soon, every fifth grader in Boone County will have the opportunity to learn math, history, language arts and... More >>
32 minutes ago Friday, December 06 2019 Dec 6, 2019 Friday, December 06, 2019 3:44:00 AM CST December 06, 2019 in News
COLUMBIA - Last winter saw major snow storms, ice, and extreme cold. This winter could see similar systems, however, the... More >>
7 hours ago Thursday, December 05 2019 Dec 5, 2019 Thursday, December 05, 2019 9:00:00 PM CST December 05, 2019 in Weather
COLUMBIA - Winter weather is often attacked in an attempt to prove climate change and global warming are not real.... More >>
7 hours ago Thursday, December 05 2019 Dec 5, 2019 Thursday, December 05, 2019 8:25:00 PM CST December 05, 2019 in Weather
COLUMBIA - While most of us use the weather forecast in order to plan our own day, some people need... More >>
8 hours ago Thursday, December 05 2019 Dec 5, 2019 Thursday, December 05, 2019 7:56:00 PM CST December 05, 2019 in Weather
COLUMBIA - Another recreational complex is coming to Mid-Missouri. The City of Columbia and officials from Boone County announced... More >>
9 hours ago Thursday, December 05 2019 Dec 5, 2019 Thursday, December 05, 2019 6:38:00 PM CST December 05, 2019 in News
KANSAS CITY - Three men were charged on Thursday for being involved in a drug-trafficking conspiracy after federal agents seized... More >>
11 hours ago Thursday, December 05 2019 Dec 5, 2019 Thursday, December 05, 2019 4:32:00 PM CST December 05, 2019 in News
COLUMBIA - A marijuana advocacy group said people who have legal medical marijuana licenses are still being arrested. In... More >>
11 hours ago Thursday, December 05 2019 Dec 5, 2019 Thursday, December 05, 2019 4:28:00 PM CST December 05, 2019 in News
JEFFERSON CITY - Jefferson City Public School nurses could be getting a new medication to add to their medicine cabinets... More >>
13 hours ago Thursday, December 05 2019 Dec 5, 2019 Thursday, December 05, 2019 2:42:00 PM CST December 05, 2019 in News
TIPTON - David Dubois was taken into custody on Monday for stealing. A property owner in Fortuna, Mo. reported... More >>
13 hours ago Thursday, December 05 2019 Dec 5, 2019 Thursday, December 05, 2019 2:31:00 PM CST December 05, 2019 in News
COLUMBIA - The search of the Lamine River for the body of Mengqi Ji Elledge entered its third consecutive... More >>
15 hours ago Thursday, December 05 2019 Dec 5, 2019 Thursday, December 05, 2019 12:49:00 PM CST December 05, 2019 in News
JEFFERSON CITY - The Missouri State Auditor's Office announced today they will deliver to Senate Leadership at least six completed... More >>
15 hours ago Thursday, December 05 2019 Dec 5, 2019 Thursday, December 05, 2019 12:44:00 PM CST December 05, 2019 in News
COLUMBIA - The Boone County Prosecutor's Office charged a man with sodomy on Thursday after a reported sexual assault at... More >>
15 hours ago Thursday, December 05 2019 Dec 5, 2019 Thursday, December 05, 2019 12:32:00 PM CST December 05, 2019 in News
JEFFERSON CITY - A nearly 100-year-old statute that has stood atop Missouri's Capitol will make her return Friday after being... More >>
16 hours ago Thursday, December 05 2019 Dec 5, 2019 Thursday, December 05, 2019 11:41:00 AM CST December 05, 2019 in News
COOPER COUNTY - Missouri State Highway Patrol troopers arrested two men when they found $1.1 million worth of THC vape... More >>
18 hours ago Thursday, December 05 2019 Dec 5, 2019 Thursday, December 05, 2019 9:47:00 AM CST December 05, 2019 in News
WASHINGTON (AP) — House Speaker Nancy Pelosi announced Thursday that the House is moving forward to draft articles of impeachment... More >>
18 hours ago Thursday, December 05 2019 Dec 5, 2019 Thursday, December 05, 2019 9:38:29 AM CST December 05, 2019 in News
COLUMBIA - Columbia's search for a new fire chief is coming to a close. A community relations specialist for... More >>
1 day ago Thursday, December 05 2019 Dec 5, 2019 Thursday, December 05, 2019 1:48:00 AM CST December 05, 2019 in News
HONOLULU (AP) - The military says a U.S. sailor shot and killed two, and wounded one at the Pearl Harbor... More >>
1 day ago Wednesday, December 04 2019 Dec 4, 2019 Wednesday, December 04, 2019 10:04:00 PM CST December 04, 2019 in News
JEFFERSON CITY - Missouri Attorney General Eric Schmitt wrote a letter of support to the Cameron football team after the... More >>
1 day ago Wednesday, December 04 2019 Dec 4, 2019 Wednesday, December 04, 2019 8:31:00 PM CST December 04, 2019 in News
Columbia, MO
Broken Clouds 47°
5am 42°
6am 40°
7am 39°
8am 37°