Missouri Lawmakers Override Veto, Enact Tax Cut

4 years 11 months 1 week 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
FULTON - What was once a vacant gas station is now the home of the new Fulton Soup Kitchen. ... More >>
2 days ago Monday, April 15 2019 Apr 15, 2019 Monday, April 15, 2019 6:01:00 PM CDT April 15, 2019 in News
JEFFERSON CITY - The person who will oversee how voting districts are mapped would be subject to a string of... More >>
2 days ago Monday, April 15 2019 Apr 15, 2019 Monday, April 15, 2019 4:24:00 PM CDT April 15, 2019 in News
COLUMBIA - Columbia Regional Airport resumed general aviation and passenger service on Monday, following a week-long shutdown. But the question... More >>
2 days ago Monday, April 15 2019 Apr 15, 2019 Monday, April 15, 2019 3:38:00 PM CDT April 15, 2019 in News
As a trainer, I am constantly asked “how can I lose weight faster?” or “what can boost my metabolism?” Sometimes,... More >>
3 days ago Monday, April 15 2019 Apr 15, 2019 Monday, April 15, 2019 1:40:00 PM CDT April 15, 2019 in Weekly Wellness
JEFFERSON CITY - Police arrested a man in connection with a weekend shooting on Hickory Street that left one person... More >>
3 days ago Monday, April 15 2019 Apr 15, 2019 Monday, April 15, 2019 10:19:00 AM CDT April 15, 2019 in News
JEFFERSON CITY – A bill before the Missouri House of Representatives on Monday would create harsher punishments for those convicted... More >>
3 days ago Monday, April 15 2019 Apr 15, 2019 Monday, April 15, 2019 6:26:00 AM CDT April 15, 2019 in News
BOONE COUNTY - Two men are in custody after a police chase ended in a fiery crash early Monday morning.... More >>
3 days ago Monday, April 15 2019 Apr 15, 2019 Monday, April 15, 2019 5:07:00 AM CDT April 15, 2019 in Top Stories
COLUMBIA - The city council is seeking input to decide whether the city should replace the streetlights in the Downtown... More >>
3 days ago Monday, April 15 2019 Apr 15, 2019 Monday, April 15, 2019 2:28:00 AM CDT April 15, 2019 in News
PETTIS COUNTY - A woman was airlifted to the hospital with serious injuries after a crash in Sedalia. A... More >>
3 days ago Sunday, April 14 2019 Apr 14, 2019 Sunday, April 14, 2019 9:54:00 PM CDT April 14, 2019 in News
COLUMBIA - A Columbia man authorities believed fled to Iceland is now in custody in Boone County. According to... More >>
3 days ago Sunday, April 14 2019 Apr 14, 2019 Sunday, April 14, 2019 7:07:00 PM CDT April 14, 2019 in News
COLUMBIA - Columbia City Council is set to discuss improvements to the Cosmo-Bethel Park Monday. According to the press... More >>
3 days ago Sunday, April 14 2019 Apr 14, 2019 Sunday, April 14, 2019 5:50:00 PM CDT April 14, 2019 in News
JEFFERSON CITY — A debate over when the public school year should begin in Missouri is pitting tourism against education... More >>
4 days ago Sunday, April 14 2019 Apr 14, 2019 Sunday, April 14, 2019 12:50:00 PM CDT April 14, 2019 in Top Stories
ST. LOUIS — A new Missouri state rule aimed at protecting wildlife from lead poisoning means that hunters will no... More >>
4 days ago Sunday, April 14 2019 Apr 14, 2019 Sunday, April 14, 2019 12:11:00 PM CDT April 14, 2019 in News
COLUMBIA - United Airlines was set to resume flights into and out of Columbia Regional Airport Sunday, following a week-long... More >>
4 days ago Sunday, April 14 2019 Apr 14, 2019 Sunday, April 14, 2019 11:52:00 AM CDT April 14, 2019 in Top Stories
COLUMBIA - The Columbia Fire Department will drop 10,000 Easter eggs from the sky in the city's first Egg-A-Palooza Egg... More >>
4 days ago Sunday, April 14 2019 Apr 14, 2019 Sunday, April 14, 2019 5:49:00 AM CDT April 14, 2019 in Top Stories
FAYETTE - Police are warning citizens to be on the lookout after a man was seen posing as law enforcement... More >>
4 days ago Saturday, April 13 2019 Apr 13, 2019 Saturday, April 13, 2019 9:49:00 PM CDT April 13, 2019 in News
COLUMBIA - Eight teams competed in a kickball tournament Saturday to raise money for Welcome Home, a transitional shelter for... More >>
4 days ago Saturday, April 13 2019 Apr 13, 2019 Saturday, April 13, 2019 4:22:00 PM CDT April 13, 2019 in News
COLUMBIA - MU hosted more than 100 events across its campus Saturday as part of Show Me Mizzou Day. ... More >>
4 days ago Saturday, April 13 2019 Apr 13, 2019 Saturday, April 13, 2019 3:49:00 PM CDT April 13, 2019 in News
Columbia, MO
Broken Clouds 52°
4pm 57°
5pm 56°
6pm 56°
7pm 55°