In the state of denial known as Missouri, school boards contemplate laying off more teachers. Families anguish over excessive tuition rates at public universities. Overworked medical professionals struggle to meet the demands of one of the nation’s unhealthiest states.
Years of disinvestment in its educational and human infrastructure have seriously damaged Missouri’s standing on many levels. The state is at a crossroads, but Democratic Gov. Jay Nixon and Republican legislative leaders don’t want to acknowledge it.
Instead of a healthy debate on finding new sources of revenue, they bicker over which is the lesser evil: to further shortchange the public universities or deprive needy blind Missourians of health care. They act as though prosperity is just one new tax credit or income tax adjustment away.
The Missouri Budget Project, an advocacy group which analyzes the state’s finances, has calculated the state shouldn’t expect to see pre-recession purchasing power until 2029.
Even before its economy tanked along with the nation’s, Missouri wasn’t in great shape.
Donald Phares, an economics professor at the University of Missouri-St. Louis, published a report last year documenting long-term fiscal trends.
His research shows Missouri has traditionally been a low-tax state and has become progressively more so. In 1970, it ranked 39th among the states for state and local taxes and fees collected per resident. In 2006, it was 47th.
But low taxes have not brought prosperity. In 2007, Missouri’s gross domestic product — the economic output per resident — ranked 36th among the 50 states, down from a ranking of 18th in 1970. Missouri’s per capita income also failed to keep pace, with its ranking dropping from 25th in 1970 to 35th in 2008.
Over the past 15 years, elected officials have reduced the corporate franchise tax, granted a bushel of tax exemptions and eliminated the general revenue sales tax on food. They have handed out tax credits like Easter candy, depriving the treasury of more than half a billion dollars in 2011.
Nixon is fond of saying he doesn’t believe you can respond to problems by “reaching into people’s pockets,” and asking them to pay more taxes. By his logic, that even extends to Missouri’s 17-cents-a-pack cigarette tax, the lowest of all 50 states. Republican leaders in the legislature are of the same mind.
But leadership means looking out for the state’s long-term welfare. Missouri’s more pressing problems, such as the declining status of its universities and its shameful public health outcomes, won’t be solved without an investment of cash. Politicians are kidding themselves and deceiving the public by insisting that the state will experience sufficient growth to make everything right.
Legislators should get to work this session on reining in tax credits and setting up a mechanism to collect sales taxes on Internet purchases, with the new revenue going into the general fund.
Nixon is a popular Democratic governor whose path to re-election in November looks clear at this point. He would do Missouri a great service by spending some of his political capital to promote reasonable revenue-enhancing measures. The place to start would be an increase in the cigarette tax, which is expected to be on the statewide ballot in November.
Denial may be blissful. It may even offer a route to re-election. But continued refusal to acknowledge the need for revenue threatens to make Missouri a second-rate state.
Copyright Kansas City Star. Reprinted with permission.