Politics & Issues
11:14 pm
Thu January 23, 2014

Nixon Calls Senate Tax-Cut Proposal 'Fiscally Irresponsible'

Missouri Gov. Jay Nixon has swiftly attacked a state Senate panel’s action to approve a phased-in tax cut that he estimates will cost the state $1 billion a year when fully implemented.

Nixon called it a “fiscally irresponsible tax experiment.”

The governor was referring to a tax-cut proposal approved early Thursday by the Senate Ways and Means Committee.  The plan is similar to last session’s SB253, a tax cut measure vetoed by the governor last summer. Because of pressure from school districts and some defecting House Republicans, an override attempt in September failed.

Gov. Jay Nixon lauds new GM vehicles during visit to St. Louis Auto Show
Credit Jo Mannies/St. Louis Public Radio and the Beacon

Legislative researchers estimate that the phased-in proposal would trim state income by at least $900 million a year when fully implemented. Backers say cutting taxes on businesses and individuals would make bring more jobs to Missouri.

Nixon told reporters during a visit Thursday to the St. Louis Auto Show that he was open to discussing the matter with legislators. But his chief objective, he said, was to use an expected increase in state revenue in fiscal year 2015 to beef up the state’s aid to education.

Nixon and Republican legislative leaders disagree how much additional income the state can expect to receive.

Nixon took note of the reason for his visit, to honor General Motors' decision to build its new trucks -- the Canyon and the Colorado -- at GM's plant in Wentzville. Such job growth was helping the state, and its budgets, get back on track, the governor said.

“We’re at a time in which we need to make sure we are keeping our commitment to public schools,’’ the governor said. “Whether it’s in preschool or keeping tuition frozen in college.

Nixon noted that Missouri taxes already are the sixth lowest in the country.

“I just do not believe a $1 billion risky experiment tax cut is the best way to build the economy of the future,” he said. “This is the time to continue with the tried and tested mechanism we’ve used in the past. Get more kids in preschool, more rigor in our high schools and more kids able to afford to go to college.”

He suggested that legislators shift from discussing tax cuts to engaging in “a focused discussion on legitimate controls… on tax-credit expenditures,” which now cost the state about $600 million a year.

The governor said that any tax-cut proposal that he found acceptable would have to meet two tests:  “Is it narrowly defined? And No. 2, can we afford it?”

The Senate Ways and Means' bill doesn't comply with either one, the governor said.