Missouri’s failure to fund higher education adequately has consequences that cannot be ignored. Higher student tuition, crippling student debt, deferred maintenance on campuses and decreased course offerings are among the painful results. Most regrettably, inadequate state support makes higher education completely unaffordable for many Missourians.
Missouri colleges and universities have suffered significant funding cuts since the recession of 2008. The situation has stabilized somewhat during the past couple of years, but the aftermath of these budget decisions will plague us for decades.
According to the Center on Budget & Policy Priorities, Missouri reduced its investment in higher education 27.7% between 2008 and 2018 — the 11th-worst cut in the U.S. The Globe reported this (Nov. 10) but did not explore a relevant issue: some tax policies that have contributed to this situation. Hundreds of millions of dollars are lost every year because of tax policies that are badly in need of revision.
Within the past five years, Govs. Jay Nixon and Eric Greitens both commissioned panels to review taxation policies. These commissions reached similar conclusions on several of Missouri's current practices, and state Auditor Nicole Galloway recently released audit reports that concurred. The bottom line is that hundreds of millions of dollars are given away each year without adequate accountability. This money could be used to fund essential services more adequately and to prevent recurring cuts to higher education funding.
For example, dozens of tax credits cost us more than $500 million per year. This loss could be much higher if all of the credits on the books were to be claimed. Tax credits can help boost the economy by producing jobs or by helping communities develop their potential, but Missouri monitors these tax giveaways loosely and does little to hold recipients accountable. Tax credits should produce a positive return on investment, and recipients should pay us back when they do not.
In another costly giveaway, retailers get a 2% discount for depositing sales taxes on time. They collect the full tax from consumers but get to keep 2% simply for doing what they are supposed to do — send them to the state on time. There is no cap on how much a retailer can claim for this discount, so the largest ones get the most benefit. Last year, one retailer retained $10 million, and Galloway reported that the total cost was $115 million.
Finally, a multitude of budget-busting tax cuts have been enacted over the past few years by legislative sessions where lower taxes have been proclaimed to be the ultimate way to boost the state’s economy. Galloway's report targeted 27 tax cuts enacted between 2014 and 2016 that reduced revenue by more than $200 million in last year's budget. The cumulative effect of these tax cuts over the next few years is staggering. As with other tax giveaways, there is no adequate system for monitoring the economic benefits that were promised when these cuts were passed, and in many instances, they can be seen simply as special-interest windfalls that do little to enhance the state’s economic picture.
Many other tax giveaways can be found if you care to explore. Meanwhile, we hear the Legislature year after year tell us that there is not enough money to cover all of Missouri's obligations and that cuts must be made. Higher education is just one place where this attitude really hurts. I suggest that our General Assembly take a cue from the governors' tax commissions and Auditor Galloway. They should start modifying our practices to enhance state revenues instead of continuing to throw money away on unproductive and unaccountable tax giveaways.
Sherry Buchanan lives in Joplin.