Lawmaker: State error will cost taxpayers this spring

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JEFFERSON CITY – Missourians may see a bill instead of a refund this tax season, after a mistake made by the state.

The mistake has to do with withholding charts, and it turns out, they weren’t taking enough money out of everyone’s incomes each month.

Missouri’s tax revenues decreased 2.9 percent for the first half of the fiscal year, from July through December 2018.

State Budget Director Dan Haug told the AP that this will change once people file tax returns this spring.

Rep. Kip Kendrick, D-Columbia, a member of the Missouri Budget Committee, said there will be a noticeable change.

“The withholding tables being off is really going to impact our budgeting year as well. Fiscal year 20, the revenue estimate is 198 million dollars in growth over the previous year,” Kendrick said.

However, he said that Missourians are really going to be affected.

“The lack of communication on the changes to withholding tables and really getting that information out to citizens is going to leave a lot of people surprised come mid-March through April,” Kendrick said.

He said the revenue drop could also be because of a layering of tax cuts phased in over the years, like the 2014 tax cut.

“It’s going to be the 3rd year of the 5-year phase and it’s going to cost us $320 million in FY20 alone so while we are growing 198 million, we could’ve grown over 500 million potentially in revenue, had that major tax cut not been implemented,” Kendrick said.

Kendrick said that being on the budget committee shows him how many priorities go under-funded each year.

“We support education, we support health care, we support infrastructure we just need to make sure we have the funding to be able to appropriately build upon the success we’ve had in those areas,” Kendrick said.

Meanwhile, Kendrick said they are pushing a bill in the legislative session that would help. He said it would delay payment without any penalties for people who are going to owe taxes.

Brian Colby, the Policy director at Missouri Budget Project, said this is unfortunate but not surprising.

"Unfortunate that this happened and the state legislatures need to be careful when making changes to tax law," Colby said. "Tax policy is difficult to get right, there are unexpected consequences."

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