UM President Tim Wolfe urges GOP to reconsider tax-cut bill

Thursday, August 15, 2013 | 8:29 p.m. CDT; updated 11:19 p.m. CDT, Thursday, August 15, 2013

SEDALIA — University of Missouri System President Tim Wolfe is actively lobbying Republican legislators to preserve Gov. Jay Nixon's veto of a bill that would cut the state's income tax rate, urging them to weigh the potential costs to higher education.

Members of the Missouri House are scheduled to head into a House caucus meeting this weekend in advance of the September special session where they could vote on the override.

Wolfe said he's working closely with the governor's office in the lobbying effort. Nixon vetoed the legislation, House Bill 253, on June 5, less than a month after the Republican-led legislature passed the bill. Supporters of the bill argue it would attract economic development to Missouri by lowering income tax rates on individuals and businesses.

One of Wolfe's main points was that Missouri didn't want to be like Kansas. Facing a $600 million revenue shortfall after reducing tax rates last year, the Kansas state government cut its spending on higher education, Wolfe said. As a result, tuition rose by 7 percent at Kansas State University and by 5 percent at the University of Kansas, Wolfe said.

"It puts us in a more competitive position," Wolfe said. "If we ... keep our tuition low, we'll attract more students from Kansas to come to MU."

State Reps. Caleb Rowden, R-Columbia, and Caleb Jones, R-California, each confirmed they have met with Wolfe within the past few weeks. Rowden and Jones voted for HB 253 earlier this summer, but neither would say whether they favored overriding the veto.

Rowden said the situation in Kansas wasn't all that relevant to Missouri's budget debate. Whereas the Kansas state government made a large cut in one fell swoop, HB 253 calls for a series of smaller cuts over 10 years undercalculated provisions. According to the bill, the decrease in tax rates will go into effect only if there is a corresponding $100 million increase in revenue in any of the three preceding fiscal years.

Still, Rowden said he is reconsidering his support for HB 253, largely because of the potential impact to K-12 and higher education.

"I'm philosophically in favor of a tax cut, but I want to be sure it is the right one with the right impact," Rowden said.

For Wolfe, the fiscal situation at the UM System remains uncertain and is complicated by Nixon's imposed state funding freeze in response to the potential override to his veto. Given the $33.7 million dent in the fiscal 2014 budget and the possibility of HB 253 passing, Wolfe said, UM administrators have been forced to make contingency plans, including possible tuition increases, caps on enrollments and employee layoffs.

Rowden pointed to the budget surplus that already exists, saying it was "ripped out from under our schools" as a political maneuver by the governor intended to pressure legislators to sustain the veto. Rowden also called the governor's withholding "blatantly unconstitutional."

State Rep. Stephen Webber, D-Columbia, said he was optimistic that the governor's veto would stand as long as a few Republican legislators who previously supported the bill are won over and none of his Democratic colleagues break from their party.

Webber said he was surprised some legislators failed to see the connection between the tax rate and the level of state government revenue. He said some seem to think the lower tax rate won't affect higher education.

"I have not had any business owners coming to me telling me they want to decrease the income tax rate," Webber said. "But I have tons telling me what we need is an educated workforce."

Supervising editor is Scott Swafford.

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