Claimed flaw in tax bill concerns Springfield leaders
JEFFERSON CITY – Springfield leaders expressed concern this morning about Gov. Jay Nixon's claim that a Republican bill would eliminate income taxes for many citizens, but held back from taking a definitive stand.
Nixon, a Democrat, said Tuesday that a sentence in Senate Bill 509, passed last week by the General Assembly, would eliminate the state's top income tax bracket. In effect, individuals making more than $9,000 would not have to pay income tax. The state would lose about $4.8 billion annually.
Though he has not yet vetoed the bill, Nixon has said it cannot be allowed to become law. Once the governor rejects the bill, lawmakers will have to decide whether to try to override his veto.
Republicans have stood by the bill and say there is nothing wrong with it. Both sides have dueling legal analyses purporting to show that their interpretation of the bill is correct.
Local civic and governmental leaders were on hand for a legislative breakfast near the Capitol this morning. They generally told a News-Leader reporter they need to take time to evaluate the legislation.
"Councils and county commissions and legislatures are made up of human beings and mistakes can be made," Mayor Bob Stephens said. "In fact, we periodically will correct language in a bill in council that just didn't quite come out the way we meant for it to. And that may be what has happened here."
Stephens said since he had been traveling to Jefferson City, he had not had a chance to look at the specific provision Nixon says is the problem, but said if the governor is correct, he would object to placing the burden for funding state government on those making less than $9,000 a year. He said people making less than that are typically part-time workers and retirees.
"It's a prescription for disaster if what Gov. Nixon is saying pans out," Stephens said.
The overall bill reduces the top personal income tax rate of 6 percent to 5.5 percent by 1/10 of a percent each year beginning in 2017, provided that the state's general revenue continues to grow. A fiscal analysis by legislative researchers found the bill will reduce revenue by about $620 million a year once fully implemented.
Jim Anderson, president of the Springfield Area Chamber of Commerce, said the Chamber is reviewing the bill, but has not yet taken a position on it. He said because the end of the legislative session is approaching (it ends May 16), if the Chamber does decide to take a position, it will do so in the next two weeks.
In its legislative priorities, the Chamber generally supports tax cuts, though Anderson said they need to be supported by evidence.
"Obviously, it needs to be data-driven. There needs to be reason and logic behind that. But yes, certainly our policy positions would support a tax cut but it has to be data-driven," Anderson said.
On Tuesday, Nixon spoke at Missouri State University to make his case against the bill. MSU President Clif Smart said he just found out about the apparent flaw in the legislation Tuesday and was not given any advance notice.
"I have read the bill. I do see what the governor is saying. That does give me some worry," Smart said.
But Smart said he could not yet say whose interpretation of the legislation is correct.