Gov's Veto of Tax Cut Bill Forces Legislature to Make Important Decision in Sept

Our governor recently vetoed legislation that would have enacted the first income tax reduction in more than 90 years. In doing so, the governor called the bill “ill-conceived” and “fiscally irresponsible” because it would eventually reduce the tax burden on Missouri families and businesses by more than $700 million each year. The governor said he had to prevent the bill from becoming law because it would jeopardize funding for education and other vital public services.

What the governor didn’t mention is the fact the bill contains safeguards to ensure funding would not be jeopardized. Specifically, it requires that revenues increase by $100 million each year before the next phase of the tax cut can be implemented. In effect, the bill says revenues have to increase by $1 billion over the 10-year period the cut to both personal and business income tax would be put into place. This is a fact that was never mentioned by the governor, but one that cannot be overlooked when talking about the impact the bill would have on state revenues.

The key thing to keep in mind with all of this is that we believe a tax cut would help our economy rather than hinder it. By allowing you and your fellow Missourians to keep more of your hard-earned dollars, and allowing you, and not the government, to determine how to spend them, we are confident economic activity would increase and state revenues would actually go up rather than down. That is why we put the safeguards in place to ensure revenues continued to increase as the tax cut was put into place.

Now that the governor has vetoed the bill, we will have a decision to make when we return for veto session in September. When the bill was passed in this body during the final week of session, the legislation received 103 votes. It takes 109 votes in the House to override a veto. When we meet as a caucus in the coming months, we will have to thoroughly discuss whether an override is something we want to pursue. I am confident that if we do, we can secure the additional six votes necessary to undo the governor’s veto and put this important piece of tax reform legislation into law.

Click on link to learn more about HB 253 - http://www.house.mo.gov/billsummary.aspx?bill=HB253&year=2013&code=R