MO Statehouse
11:43 am
Wed June 5, 2013

Nixon Vetoes 'Fiscally Irresponsible' Income Tax Measure

Updated at 4:45 p.m. with responses from House Speaker Tim Jones (R, Eureka) and Mo. Senator Will Kraus (R, Lee's Summit).

Citing a lack of "fundamental fairness," Gov. Jay Nixon has vetoed legislation that would have reduced Missouri's income tax rates for the first time in more than 90 years.

The  bill would have gradually reduced corporate and individual income tax rates while also creating a new deduction for business income reported on individual income taxes.

In a veto message, Nixon called the Republican-supported measure an "ill-conceived, fiscally irresponsible experiment" that would jeopardize funding for basic state services like education while increasing taxes on things like college textbooks and prescription drugs. He was also sharply critical of a provision that grants tax breaks based on how businesses are legally organized, saying it creates an incentive for companies to restructure simply for tax breaks.

The measure passed both chambers by a wide margin, but not by enough in the House to override today's veto.

Republican lawmakers, especially those from the Kansas City area, are blasting the Democratic Governor for vetoing House Bill 253.  They saw the bill as a way to compete with neighboring Kansas for new businesses and jobs.  Republican Senator Will Kraus of Lee's Summit was one of the bill's handlers.  He wants GOP leaders to attempt an override when lawmakers return to Jefferson City in September for their annual veto session.

"Every time we've passed the broad-based tax cut in the Missouri Senate, we've had 23 votes, which is enough to override the Governor's veto," Kraus said.  "Assuming we don't get an override, we'll be back next year with another bill (and we'll) put it on his desk again."

An override in the Missouri House, though, may not be so easy, as three Republicans voted against the measure during the regular session.  House Speaker Tim Jones (R, Eureka) says he's taking a wait-and-see approach before deciding whether they'll try to override the tax cut veto.

"We'll sit down and go through the entire list of all the bills with all of the bill sponsors – we want to obtain their opinion first," Jones said.  "After we obtain a position as a caucus on all vetoed bills, we'll share that sentiment with the Senate and then determine what we can move forward on in September."

After the Governor's veto, State Representative T.J. Berry (R, Kearney), the bill's sponsor, released the following statement:

“It was with great disappointment that I received the news of Gov. Nixon’s veto of the most significant tax cut proposal that has crossed a Missouri governor’s desk in more than 90 years. While the governor has tried to paint himself as an advocate for a lower tax burden on Missouri families and businesses, his actions prove he would prefer to keep taxpayer dollars in government coffers rather than in the pockets of the people where they belong.

 

As Missourians, we should be outraged that the governor thinks he knows best how to spend our tax dollars. How can we see his actions as anything but hypocritical when he tells Missourians he supports cutting taxes, but vetoes a tax cut bill by mislabeling it as a tax increase? How can the governor justify calling the bill both a tax increase and a tax decrease at the same time?

 

In vetoing the bill, the governor made the claim that he wants to preserve funding for vital state services. Why then is he willing to throw away $5.4 million on a plane and more than $1,500 in fuel costs to fly to Kansas City and Springfield to hold politicized veto ceremonies that could easily have been held in his Jefferson City office? These are taxpayer dollars he is wasting to veto a bill that would have allowed Missourians to keep more of their hard-earned dollars from being misused in this way.

 

We also should be offended that the governor continues to pick and choose his numbers to defend his decision to veto this much-needed reform of our tax code. His fuzzy math with the prescription drug tax was pulled out of thin air as it was something that was never brought up during the fiscal review process for the bill.

 

As our economy is bouncing back and revenues continue to increase at a greater-than-expected rate, we have the opportunity to lower the tax burden and really share this money with the people. We believe Missourians should be able to keep more of their money in their pockets because we believe they know best how to spend it. My goal is to work with my colleagues to secure the votes to override the governor’s ill-conceived veto so that we can make this tax cut a reality when we return for veto session in September.”

The Missouri General Assembly's veto session is scheduled for September 11th.  It usually lasts only one day, but can go longer if needed.

Follow Rachel Lippmann and Marshall Griffin on Twitter@rlippmann @MarshallGReport