Rarely has a veto session of the Missouri General Assembly received such a buildup as the one beginning Wednesday. But rarely has a bill as bad as House Bill 253 stood a chance of being enacted into law.
Republican legislative leaders are still trying to muster support for an override of Gov. Jay Nixon’s veto of the income-tax cut legislation. But up to a half-dozen GOP members appear ready to sustain the veto, and if that happens, the bill won’t have enough votes to become law.
While that’s encouraging news, this is no time for educators and other opponents to back off their campaign to point out fatal flaws in the legislation. Which brings us to our Top Five Failures of House Bill 253:
- It raises taxes on seniors and students by repealing a sales tax exemption on prescription medicine and textbooks.
Sponsors say that — whoops — they didn’t mean to do that. But given the legislature’s recent performance, it’s a mistake to trust lawmakers to quickly fix the problem.
- It favors the wealthy at the expense of middle-income Missourians.
If the tax cuts are enacted, a household of two that reports $225,000 in net business income would see its taxes reduced by $1,150 a year. A family of three with one earner and an income of $60,000 would see a tax break of just $15. But middle-income families could expect to pay more for college tuition, school supplies and property taxes.
- The trigger lock is broken.
Sponsors reassuringly say they protected the state budget with provisions that tax cuts won’t go into effect unless state revenue collections increased by at least $100 million over the previous fiscal year. And growth one year doesn’t account for a fiscal cliff the next year. Missouri’s revenues increased by more than $100 million in fiscal year 2008 but saw those gains wiped out during the Great Recession in 2009. Had House Bill 253 been in effect, the state would have had to deal with income-tax cuts along with everything else.
- It encourages “creative accounting.”
House Bill 253 gives the biggest tax breaks to “pass-through” businesses — law firms and lobbyists come to mind — which could see half of their income exempted from taxes over five years. Meanwhile, other businesses would see only a minor change in their tax rates. Businesses could restructure as pass-through entities, taking money out of the state treasury without creating new jobs.
- And for what?
There is no good research that the kinds of tax cuts called for in House Bill 253 will encourage employers to hire people or move businesses to Missouri.
As for everybody else, they will be wondering what happened to Missouri’s schools and colleges and services. And remembering how the General Assembly sold out the state.
Copyright The Kansas City Star. Reprinted with permission.