In 1980, Missouri voters passed the Hancock Amendment to the state constitution, which limited the legislature's ability to raise state revenue beyond a threshold of 5.6 percent of an individual taxpayer's income.
At the time, the combined local and state tax rate in the state, on average, was 8.6 percent. That placed Missouri 34th in taxes in the nation.
That's a generally fair ranking for Missouri, considering its relatively low cost of living and its mix of urban and rural communities.
But a lot has changed in three decades.
The Hancock Amendment was meant to be a check against unfettered spending by lawmakers, punishing them — and rewarding taxpayers with refunds — if the state spent too much. However, in today's "no new taxes" political atmosphere, Hancock's revenue limits are but a dream.
Today, Missouri still is ranked 34th, according to the conservative Tax Foundation, but it's not because state taxes have kept pace. The overall local and state tax burden for Missourians was 9 percent in 2009, the last year for which the foundation has complete numbers. The tax burden has been shifted to local taxpayers as the state abdicated its responsibility for paying for services it mandates.
That message was made crystal clear in an audit released by state Auditor Tom Schweich last week, examining Missouri's compliance with the Hancock Amendment.
For the fiscal year that ended June 30, state tax collections were $4 billion below the threshold allowed by the Hancock Amendment.
That's billion, with a "b."
That's a full 17 percent of the state's $23 billion budget.
That's $4 billion in potential revenue, keeping the state under a restrictive revenue cap set all the way back in 1980, that, to some extent, our lawmakers are leaving on the table.
To be fair, much of that money simply is lost to the state budget because of the tough economy.
But it's impossible not to see the disconnect when lawmakers are talking about taking health care away from blind Missourians when they have let many tax dollars slip through their fingers.
Here's the number that really puts Missouri's low-tax status in perspective. According to Schweich's audit, Missouri's per-capita state tax rate is 3.8 percent. Based on state-by-state per-capita tax rankings in fiscal 2009 (fiscal 2010 figures aren't yet available), that makes Missouri the lowest tax-collecting state per capita in the nation. Missouri was No. 45 just a year ago.
You've heard about the race to the bottom? Missouri won.
What's the prize for winning that race?
One obvious result: Higher local taxes. Local governments must pay for what the state won't.
There's also a sputtering economy, some of the lowest rankings in the nation for spending on education, public health and other essential public services, and roads and bridges that are so bad that some officials want to sell Interstate 70 to the highest bidder.
If low taxes were an economic panacea, Missouri would be thriving. It's not.
The numbers don't lie. Missouri isn't investing in its future, and our residents are suffering for it.
A lot of folks purchased Mega Millions lottery tickets last week dreaming about what they could do with $640 million. Imagine what $4 billion would do for Missouri.
Copyright St. Louis Post-Dispatch. Reprinted with permission.