The Joplin Globe, Joplin, MO

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July 28, 2013

Tax-cut legislation becomes divisive as GOP organizes to override veto

JEFFERSON CITY, Mo. — Lawmakers from the Joplin area say they will support the effort to override the governor’s veto of legislation that would reduce income taxes for individuals and corporations.

The attempt is setting up to be a close call.

The legislation — House Bill 253 — would reduce taxes by half a percent for all Missourians over the next decade, and by 2017 it would allow individuals to deduct 50 percent of business income. It also would reduce corporate income taxes by 3 percent over the next decade.

While some business interests favor the legislation, other groups, including those representing public schools, are calling on legislators to support the governor.

Gov. Jay Nixon last week brought out numbers put together by the Missouri Association of School Administrators detailing a scenario in which schools could lose revenue as taxes fall. The association opposes HB 253, claiming between $260 million and $450 million in cuts to K-12 education would be necessary if the veto is overridden and income taxes are cut.

For Southwest Missouri schools, that could mean millions in cuts.

According to Nixon’s office, the Joplin School District could face a cut between $1.64 million and $2.83 million, with similar cuts projected for the Neosho, Webb City and Carthage districts.

C.J. Huff, Joplin superintendent, said cuts even on the low end of that estimate could be disastrous for the district.

“Having something like this hit us from left field, I can’t even describe the impact. It would be devastating,” Huff said. He said between 65 and 70 percent of the district’s budget is spent on staffing, even after efforts to “go lean” in recent years.

But state Rep. Tom Flanigan, R-Carthage, vice chairman of the House Budget Committee, said the state’s fiscal “world would have to blow up” in order for the potential result the Nixon administration is citing to come true.

“It is crazy you’re going to worry about something that is ‘potential,’ ‘could be,’ ‘may,’ and they’re throwing those words out like this is already happening or is in the process of happening,” he said.

“The thing about (House Bill) 253 is there are a lot of moving parts, and the governor likes to scare people with moving parts. He scared every school administrator with these numbers from MASA’s (Missouri Association of School Administrators) own website.”

Huff acknowledged that there are “a lot of unknowns” for school districts, but he said he and other Missouri school administrators are acting based on the projections they have in front of them right now.

“This is not a time in our state’s history to be experimenting with policies that could significantly damage, if not completely devastate, schools and others that would be impacted by the potential this would not work,” Huff said.

The General Assembly’s own numbers presume that state revenues could be reduced by at least $700 million annually when the bill is fully implemented over 10 years, while the immediate cost would be smaller. Under the bill, tax rates would not be reduced unless the state had revenue growth of $100 million each year.

Nixon has said he believes the annual cost would be higher and could hit as much as $1.2 billion. He said lawmakers have a clear choice as they consider whether to override his veto during their session in September.

“As these numbers make clear,” he said last week, “lawmakers can either support House Bill 253 or they can support public education, but they can’t do both.”

While House Republicans have not officially decided whether they will seek a veto override, Nixon’s aggressive public push against the bill faced some of its first concerted resistance last week by legislative leaders. House Budget Committee Chairman Rick Stream, R-St. Louis, wrote in a memo to colleagues that with Missouri revenues up, and with a projected $150 million surplus, he believes the cost of the tax cut would be covered for the first two years.

“HB 253 is not perfect, and there are probably some things that will need to be fixed when we come back in January, but the fear mongering coming out of the executive branch has gone too far,” he said. “I believe the governor philosophically disagrees with us on lower taxes and is throwing a tantrum to get his way.”

Southwest Missouri representatives — all Republicans — including Flanigan, Charlie Davis, Mike Kelley, Bill Lant, Bill Reiboldt and Bill White, were among the members who supported the original bill, and none of them has changed his mind at this point.

Still, it is unclear whether the bill’s supporters have enough votes to override Nixon’s veto. The original bill had support in the House from 100 Republicans and three Democrats — six votes short of the constitutional requirement of 109 votes needed to override a veto. Three Republicans and 48 Democrats opposed the bill. An override attempt also would need two-thirds support in the Senate.

One of the earlier Republican supporters, Rep. Nate Walker, of the Kirksville area, has indicated he has become undecided about the bill, and a handful of the original “aye” votes have begun to join him. And two of the three Democratic representatives who originally voted for the bill — Steve Hodges, of East Prairie, and Ed Schieffer, of Troy — have said they will not vote to override Nixon’s veto. The third previously supportive Democrat — Jeff Roorda, of Barnhart — has said he now is undecided.

Flanigan said overriding Nixon’s veto will be a “struggle” for Republicans because members are “an autonomous group of people, and everyone is not just going to press the ‘yes’ button.”

Across the state, St. Louis area investor and GOP donor Rex Sinquefield has put up $2.35 million to fund a commercial and lobbying campaign to pressure holdouts to support the legislation. His effort, called Grow Missouri, includes a statewide television and radio ad campaign, as well as a lobbying effort. The group specifically highlights the so-called economic “border war” between Kansas and Missouri, which is most intense in the Kansas City area, where some businesses have moved to Kansas because of a more favorable tax climate.

“The more Missourians find out about this, that the state Legislature decided that when state revenues were increasing they were going to return some of that money, people really resonate with that,” said Aaron Willard, treasurer of Grow Missouri.

Nixon is expected to continue his own public offensive this week with stops today(Monday) in St. Louis and Kansas City.

THE ASSOCIATED PRESS contributed to this report.



Nixon vetoes

DEMOCRATIC GOV. JAY NIXON vetoed more of the bills passed by Missouri’s Republican-led Legislature this year than in any of his four previous years in office. He spiked 29 of the 145 non-budgetary bills sent to his desk — a 20 percent rejection rate.

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