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Nixon cites Fulton hospital in defending tax cut veto

Nixon cites Fulton hospital in defending tax cut veto

July 30th, 2013 by CHRIS BLANK, Associated Press in News

FULTON, Mo. (AP) - Missouri Gov. Jay Nixon defended his veto of tax-cutting legislation Tuesday while touring the state mental health hospital and asserting lawmakers cannot simultaneously support a veto override and investments for the facility.

Nixon said the Fulton State Hospital needs to be improved for the safety of staff and health of patients and that it cannot be done if the tax cut is enacted. The governor announced in late June the freezing of $400 million for state services, education and construction because of concerns the veto could be overridden. The spending restrictions include $13 million for planning and designing a new facility at the hospital.

"This is an old, antiquated rambling campus that is both unsafe and unfitting to the responsibilities that are carried on here," Nixon said.

The legislation would reduce tax rates for individuals and corporations and create a new deduction for business income reported on individual tax returns. Legislative projections estimated the bill would reduce state revenues by more than $700 million annually after it is fully implemented. Some of the tax cuts are contingent upon growth in state revenues.

Nixon says the annual cost would be higher and as much as $1.2 billion in the short term, based upon other provisions in the legislation.

The tax cut was a priority for the Republican-led Legislature and would be the first income tax rate reduction in Missouri since 1921.

Supporters of the cut have started a campaign encouraging lawmakers to override Nixon's veto. Ray McCarty, president and CEO of Associated Industries of Missouri, said the governor has over-estimated the cost.

"The threats and the withholdings and all of that that is being employed right now, is really a game of smoke and mirrors," he said, adding that doing nothing would likely prompt Missouri businesses to move elsewhere.

Missouri lawmakers return to the Capitol in September to consider veto overrides, which require a two-thirds majority vote. That would require the vote of every House Republican or support from some of Nixon's fellow Democrats.

The Fulton State Hospital is the only maximum and intermediate security psychiatric hospital in Missouri. Patients include those who have been committed by the courts for evaluation and treatment. It also is the statewide treatment facility for people who have been found not guilty or unable to stand trial because of mental disease. There are more than three dozen buildings on the grounds, including several that are vacant.