The politicians who want the Missouri General Assembly to override Gov. Jay Nixon’s veto aren’t saying much about all the consequences if House Bill 253 becomes law. The governor vetoed the bill because he said it was flawed and would result in a cut in funding for some services, including education.
Many Republicans in the General Assembly want to override the governor’s veto claiming that the tax cuts in HB 253 will make Missouri more attractive for business and industry, resulting in job creation.
Tim Jones, Speaker of the House, asked Attorney General Chris Koster if provisions of HB 253 would enable taxpayers to seek refunds of taxes previously paid for up to three prior tax years.
“In the opinion of this office, the plain language of the new legislation suggests that, if certain triggering events set forth in the statute occur, taxpayers may seek refunds of taxes paid in the three preceding tax years,” is what Speaker Jones was told in a letter from the attorney general. That would be even more devastating to the state’s fiscal condition.
There hasn’t been much publicity about this opinion by the attorney general. We don’t know why that’s the case.
HB 253 would lower the state’s top personal income tax rate to 5.5 percent from 6 percent, and the corporate tax rate by 3 points, making it 3.25 percent. Gov. Nixon said if the vetoed bill becomes law it will cost the state $800 million in revenue, plus any refunds that are made. Services will have to be cut by what is lost in revenue.
It’s hard to make a strong argument that HB 253 will spur economic development. Missouri, a low tax state, has a number of tax abatement and grant programs that have spurred economic development by helping industries to locate and expand in the state. We have seen this happen in Franklin County.
The upcoming veto session is going to be focused chiefly on HB 253. Members of the General Assembly need to study all of the ramifications of the bill and to consider the general welfare of the people rather than giving the wealthy tax breaks.