Finger pointing continues over state budget

For most of the last two weeks, Missouri House and Senate leaders have not commented on Gov. Jay Nixon’s allegations that lawmakers passed eight bills in the final eight hours of this year’s legislative session that “blew up” a hole in the state operating budget that lawmakers passed just over three weeks ago.

But Friday morning, House Speaker Tim Jones and Senate President Pro Tem Tom Dempsey told reporters that Nixon is overstating his case.

“To my knowledge, the fiscal notes — which came from the departments — didn’t have the size of the hit to the budget that the governor’s numbers have,” Dempsey, R-St. Charles, said. “They have a tendency to put forward a worst-case scenario when they do their post-session analysis, so I guess I’m a skeptic when they put their numbers forward.”

Jones, R-Eureka, told reporters: “He’s standing up and protecting for government and taxing authorities.

“We stood up for the taxpayers, small business owners, Missouri individuals and workers, to try to keep more wages in their pockets, so they’re not unfairly taxed.”

This week, the Office of Administration’s Budget and Planning division finished its calculations on the impact of those bills, saying tax cuts and exemptions contained in the eight bills will cost the state government $425 million in revenues, and will reduce counties’ and cities’ sales tax incomes by a total of $351 million — each year.

“I think it’s a mistake to put the bills together,” Dempsey said Friday. “There are good aspects of all of those pieces of legislation.”

Jones added there have been a lot of complaints from a residents, taxpayers and small business owners. “The Department of Revenue is starting to expand its taxing authority under current, existing law — we believe, in violation of that law,” he said. “The bills were clarifying language — and they were designed to create new incentives.”

Supporters of the changes have weighed in, as well.

The Missouri Chamber of Commerce and Industry criticized “Nixon’s vague statements and questionable cost estimates.”

President Dan Mehan noted that Senate Bill 662, sponsored by Sen. Will Kraus, R-Lee’s Summit, requires the Revenue department to notify businesses when the agency makes a change in its interpretation of Missouri’s sales tax laws.

“How can letting employers know ahead of time how a change in tax policy would impact them cost $100 million annually?” Mehan asked. “Do we want to be a state where ambushing employers is a strategy for adding $100 million annually to the state coffers?”

Michelle Gleba, the Revenue department’s information director, told the News Tribune in an email: “On Jan. 21, the Department of Revenue provided the Legislative Oversight Division with a $100 million potential fiscal impact of SB662.

“The $500,000 accounted for the costs associated to the Department of Revenue for staffing and the administrative costs of implementing the bill, such as mailing costs.”

The state Chamber news release also cited Senate Bill 584 as containing a number of economic development incentives, including a tax exemption to attract more data centers to our state.

Nixon spokeswoman Channing Ansley said language in the final version of Dixon’s bill “was not in an introduced bill, never had a public hearing and does not include all of the taxpayer protections that were included in earlier versions of data center-specific legislation, such as job creation and required return on investment.”

Dempsey and Jones both said they’ll look at the governor’s messages on any of the bills he decides to veto, then decide whether to override those vetoes during the Sept. 10 veto session.

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