A Better St. Louis. Powered by Journalism.
  • Twitter
  • Facebook
  • Print
  • Email

Nixon expresses 'serious concerns' over tax cut plan, criticizes budget bills

In Economy

2:33 pm on Fri, 05.10.13

Gov. Jay Nixon indicated Friday that he had serious misgivings about a broad-based tax cut bill that the Missouri General Assembly has sent to his desk.

Jay Nixon
Jay Nixon

But Nixon, a Democrat, stopped short of saying whether he would sign or veto the measure, which was crafted to compete with neighboring states, such as Kansas, that have aggressively cut taxes.

Among other things, state Sen. Eric Schmitt's bill would gradually cut personal income taxes by a half of a point over the next 10 years. It would also phase in over five years a 50 percent deduction on business income on individual tax returns. It would also phase in a cut almost as large on corporate income taxes, by lowering the tax rate from 6.25 percent to 3.25 percent over 10 years.

Schmitt told the Beacon earlier this week that there's also a "fiscal note for inaction" to compete with states like Kansas, which has instituted aggressive tax cuts for corporations and individuals. (Kansas has had to cut state spending dramatically as a result.)

But some Democrats have argued the bill would drain general revenue dollars needed for vital services. The Missouri Budget Project, for instance, estimated that the bill could cost over $800 million when it is phased in all the way.

And at a press conference on Friday, Nixon said he had "serious concerns" about Schmitt's legislation.

"Taking more than $800 million out of our state budget -- the equivalent of wiping out all of public higher education or closing all our prisons or eliminating the Department of Mental Health -- is not the fiscally responsible approach," Nixon said. "Again, now is the time to strengthen our state's foundation of fiscal discipline, not undermine it with reckless Washington-style gimmicks."

Asked if his "serious concerns" would lead to a veto, Nixon said "we'll review it very carefully, but I have serious concerns about its impact."

"The bill's not on my desk yet and there may be other parts of it that are worth noting at the time I take my constitutional responsibilities," Nixon said. 

If Nixon vetoes the bill, it could spark a showdown at the General Assembly's veto session. Lawmakers in both chambers see the bill as a major priority. In fact, House Majority Leader John Diehl, R-Town and Country, called the passage of the legislation as "probably one of the most significant days in terms of tax policy in this state."

But the bill fell six votes short of a veto-proof majority in the Missouri House. Three Republicans voted against the bill, although seven Republicans didn't cast a vote on the measure. Three Democrats voted in favor of the bill.

Before Nixon's press conference, two business groups -- the Missouri chapter of the National Federation of Independent Businesses and the Associated Industries of Missouri -- sent out statements urging Nixon to sign the bill. 

NFIB director Brad Jones said, “The best economic development tool a state can have is lower taxes." And AIM president Ray McCarty noted that bill has triggers that delay full implementation of the bill if the state's general revenue doesn't grow by a certain amount.

"While the calculation is cumbersome and complicated, we are happy that the business income deduction was preserved as we originally drafted it and that general tax relief has passed the General Assembly this session," said McCarty. "We look forward to Gov. Nixon's approval of this responsible approach to tax reduction."

Nixon reiterates budget criticism

The General Assembly on Thursday also sent Nixon the bills that encompass state's budget for the 2014 fiscal year. And while Nixon praised some aspects of the document, he also repeated criticism expressed earlier this week.

For one thing, Nixon criticized how the budget included provisions that appeared to make the governor choose between a program to help low-income elderly renters, and early childhood and health-care programs. The budget would only fund popular programs -- like early childhood education for the developmentally disabled, health care for the blind and funding for low-income clinics -- if Nixon signs legislation eliminating a tax credit for low-income elderly and disabled people who rent their homes, which is part of a "circuit breaker" tax credit.

Nixon said earlier this year he wouldn't sign a bill changing the circuit breaker without comprehensive changes to tax credits. He said on Friday that the "budget irresponsibly pits children with developmental disabilities against low-income seniors." And he said lawmakers should spend the last week of session trying to reverse the situation.

"It's clear that the problem with First Steps is solvable and I hope they spend the next week getting it solved," said Nixon, referring to the program for the developmentally disabled. "We're certainly looking forward to working with the legislature for a path forward on that area to make sure we protect an important program that they've put at risk here."

"I think that First Steps is in direct peril unless they take action to assist us in getting some sort of patch or solution to go further," he added.

Nixon also reiterated his announcement that he will have to make layoffs and service reductions to the Division of Motor Vehicles. Budget negotiators from the House and Senate agreed to a version of the state's budget for the coming fiscal year (FY2014) that includes only eight months worth of funding for the Division of Motor Vehicles, in effect a one-third cut of its annual budget. That decision reflects Republican criticism of the new method in which the Department of Revenue issues driver's licenses. 

Some lawmakers -- including Senate Appropriations Chairman Kurt Schaefer, R-Columbia -- criticized Nixon's move to lay off staff as unnecessary. He and others say that the legislature will fund the rest of the agency's budget if they make certain concessions.

But Nixon said on Friday that he had few other options.

Most Missourians, he said, "want the legislature to come to town, do their work, authorize budgets and head back to their homes where the part-time legislature has great time to spend with their constituents," Nixon said. "Missourians did not say that we're going to have a situation where we operate our budgets on a series of continuing resolutions and cause a constant budgeting process to run through."

No Comments

Join The Beacon

When you register with the Beacon, you can save your searches as news alerts, rsvp for events, manage your donations and receive news and updates from the Beacon team.

Register Now

Already a Member

Getting around the new site

Take a look at our tutorials to help you get the hang of the new site.

Most Discussed Articles By Beacon Members

Conference of American nuns will mull response to Vatican charges

In Nation

7:55 am on Fri, 08.03.12

Meeting in St. Louis next week, the Leadership Conference of Women Religious will have its first opportunity as an assembled group to consider what to do after the Vatican issued a mandate for change this spring. It calls on the conference to reorganize and more strictly observe church teachings.

The 'free' Zoo

In Commentary

7:51 am on Tue, 05.22.12

When a family of four goes to the St. Louis Zoo, they can be forgiven for not knowing it will cost them $60, $72 if they park. If they can't pay, the alternative is to tell the kids they can't do what kids do at the zoo.

Featured Articles

House sends Boeing incentive bill to Nixon

In Economy

12:55 pm on Fri, 12.06.13

The Missouri House easily passed legislation aimed at attracting production of the 777x, a move that wraps up a legislative special session that saw little suspense and few surprises. The bill now goes to Gov. Jay Nixon, who has strongly supported the legislation.

Gandhi inspired Mandela on South Africa's 'Long Road to Freedom'

In World

10:10 am on Fri, 12.06.13

Nelson Mandela, who died Thursday at the age of 95, was a towering moral figure of the 20th century -- along with Mahatma Gandhi. It was no coincidence that Gandhi and Mandela, whose paths never crossed directly, both embarked on their campaigns against discrimination in South Africa. It was when Mandela won election as South Africa’s first black president that Gandhi's influence became apparent.

Featured Articles

Regina Carter brings jazz and therapy to Children's Hospital

6:36 am on Mon, 12.09.13

One night, the violinist is taking bows before a standing ovation at Jazz at the Bistro. The next afternoon, some of her audience may have trouble standing, but the kids in the playroom at Children's Hospital were no less appreciative. “Jazz is medicine personified," according to a doctor who brings in the jazz musicians.

Encore: Dead before death

In Performing Arts

12:58 am on Fri, 12.06.13

For years , the author was certain he would never come to appreciate The Grateful Dead, let alone be a Deadhead. But little by little, he's come around. He talks about his conversion and relates a real evolution: by a musician who went on to play with the Schwag, a Dead cover band.

Featured Articles

Schlichter honored with St. Louis Award

In Region

4:57 pm on Tue, 12.03.13

The attorney has founded Arch Grants, which brings together nonprofit philanthropy and commercially viable opportunitiesto fund new business startups, and Mentor St. Louis, which finds adult mentors for elementary students in the St. Louis Public School System. He was the driving force behind the state's historic tax credit program.

BioGenerator sets open house to celebrate new digs for entrepreneurs-in-residence

In InnovationSTL

12:29 pm on Tue, 11.12.13

BioSTL's BioGenerator organization is on the move as its entrepreneurs-in-residence find a new home in 4,300 square feet of office and conference space in an old automobile factory. The blossoming program, which helps BioGenerator's portfolio companies to get off the ground, continues to pay dividends within the growing biotech community.

Ambassadors aim to soften rough landing for St. Louis immigrants

In InnovationSTL

6:34 am on Fri, 11.08.13

The St. Louis Mosaic Project is set to hold an orientation for its new ambassadors -- dozens of foreign and native-born volunteers who aim to help make the community a more welcoming place for those from other nations. Participants will be expected to do everything from visiting local restaurants serving international cuisine to having dinner with an immigrant to the area.

Recent Articles

More Articles

Innovation and entrepreneurial activity are on the rise in St. Louis, especially in bioscience, technology and alternative energy. The Beacon's InnovationSTL section focuses on the people who are part of this wave, what they're doing and how this is shaping our future. To many St. Louisans, this wave is not yet visible. InnovationSTL aims to change that. We welcome you to share your knowledge, learn more about this vibrant trend and discuss its impact.

Featured Articles

Regina Carter brings jazz and therapy to Children's Hospital

6:36 am on Mon, 12.09.13

One night, the violinist is taking bows before a standing ovation at Jazz at the Bistro. The next afternoon, some of her audience may have trouble standing, but the kids in the playroom at Children's Hospital were no less appreciative. “Jazz is medicine personified," according to a doctor who brings in the jazz musicians.

Featured Articles

Featured Events:

Upcoming Events

View Full Calendar

More About The Beacon Home