Tax cuts
1:18 am
Fri May 9, 2014

Commentary: Did Missouri Conservatives Just Peak?

The state Legislature recently put in place a series of tax cuts, overriding Gov. Jay Nixon’s veto. It was a banner day for the Republicans and their allies who drove the fight, including the hard-right national group, ALEC, the American Legislative Exchange Council, business organizations, and multi-millionaire libertarian Rex Sinquefield. The current House speaker, Tim Jones, from exurban St. Louis, serves on the board of ALEC; and many other Republican state legislators are ALEC members.

Credit (via Flickr/Tax Credits)

While they may be celebrating, a look at our neighbors in Kansas offers a sobering vision of our state’s future. When Kansas cut its income tax, cuts in many government services followed, but there were little obvious benefits to its economy. Last week, on May 1, Moody’s Investors Service downgraded Kansas bonds, threatening to increase borrowing costs for the state.

Kansas tax policy has had very high political costs for conservative Republicans. In a February poll, 51 percent disapproved of the job Gov. Sam Brownback was doing, and only a third approved. Even among Republicans, Brownback failed to muster 50 percent approval.

Will Missouri’s experience mirror Kansas? The Missouri tax cuts do not go into effect for at least three years, so it will take time to observe their impact. However, even as their political power is at an all-time high, Missouri’s conservative Republicans have reason to be concerned. There may be a price to pay when citizens see cuts in services our state helps pay for, from public schools and parks to roads and emergency preparedness.

Nationally, conservatives see Missouri’s tax bill as a touchstone for their agenda. Grover Norquist, president of Americans for Tax Reform and perhaps the nation’s most famous anti-tax crusader, appeared with Speaker Jones to build support for the override.

The tax cuts take effect in 2017, but only if state revenues in the preceding year are at least $150 million greater than the largest revenues in the three previous years.

There is little debate that the new tax cut will benefit businesses and high-income taxpayers much more than middle- and lower-income Missourians. In the next recession, the cuts could worsen public sector job losses just as private jobs evaporate. Had the law been in effect in 2008, for example, it would have triggered deep revenue and service cuts in 2009, increasing the misery as the recession wreaked economic havoc in the state. Conservatives argue that these cuts would stimulate private enterprise and economic growth, but there is no impartial evidence to support these claims.

So, what happens next?

More tough policy fights lie ahead in Jefferson City. Gov. Jay Nixon, Democratic legislators, a handful of their Republicans colleagues, hospitals and the Missouri Chamber of Commerce support accepting federal funds to expand Medicaid. It is virtually certain that the legislature will not act on the issue this year, but the fight will continue in 2015. And there will be continued fighting over ALEC policy initiatives to weaken labor unions.

Until recently, Missouri served as a bellwether for American presidential elections. While Missouri is no longer a swing state in presidential elections, it is ground zero in a national fight between conservative Republican ideology and centrist pragmatism.

Will the conservative movement continue riding high? Or will people look back at yesterday’s override as the moment when conservatives went too far, harming the state’s economy and beginning a process that will unravel their political fortunes?  The answer turns on the effectiveness of their opposition, to a coalition of liberals, moderates, and instinctive traditionalists. Those traditionalists, a backbone of Missouri’s politics, have always resisted radical experiments. They hold much political power, and they are the kinds of people who gave the state its distinctive slogan: Show Me.

David Brian Robertson and David Kimball are professors of political science at the University of Missouri-St. Louis.

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