House passes bill providing a one-time tax credit for some Missourians
With the Missouri House leaving $1.8 billion in general revenue unspent when it sent its version of the state’s budget to the Senate, members voted on Thursday to use a billion of it for one-time, nonrefundable tax credits for Missourians.
Under the legislation, residents who paid state taxes would receive a tax credit “equal to the lesser of each eligible individual's Missouri income tax due.” That amount could go as high as $500 for individual filers or $1,000 for couples filing jointly.
House Budget Chair Cody Smith, R-Carthage, said this bill would essentially give money back to those who paid revenue into the Missouri treasury.
“We are in a situation where we have excess revenues in the state treasury. And to me, that means it's time to give some of those dollars back to those that paid it in,” Smith said.
But Democrats and Republicans disagree as to who the state’s excess dollars should be helping, as the credit plan would help more wealthy Missourians than low-income residents.
“With all due respect, I think that this is a deceptive and sneaky proposal, just to say that we gave folks $500 back when in reality, not many people will see that $500 or $1,000,” Rep. Kevin Windham, D-Hillsdale, said.
According to the state Department of Revenue, of the around 3.2 million state income taxpayers, fewer than half could see a tax credit of the full amount they would be entitled to.
An estimated 43% of state taxpayers would receive their full credit. Around 30% would receive some, including as little as $1, while roughly 27% would earn nothing.
As the tax credit is nonrefundable, that means taxpayers would only earn back what they paid in state taxes, with those who didn’t owe any taxes receiving nothing.
Democrats spent much of their time on the House floor both Wednesday and Thursday advocating for the state to provide monetary relief for all Missourians.
“It is very sad that we aren’t doing all that we can to make sure that we are maximizing the intent of this bill and maximizing who gets this,” Rep. LaKeySha Bosley, D-St. Louis, said.
Republicans disagreed, including Rep. Shamed Dogan, R-Ballwin.
“Instead of giving 73% of Missourians a break, we’re going to say no to them because it doesn’t cover 100% of Missourians? Are you kidding me?” Dogan said.
Another argument by Republicans is the state will already provide relief to Missouri’s low-income residents through programs in the budget.
“We are subsidizing their housing through rental assistance, their utilities through utility subsidies, their food, their education, and ultimately, now their health care in an expanded way through Medicaid Expansion,” Smith said. “So, we are addressing the needs of low-income Missourians on a scale that we have never done before.”
The legislation, which House members voted 103-44 to advance to the Senate, was introduced only last week. Rep. Ingrid Burnett, D-Kansas City, spoke against not only the content of the bill, but also the pace at which it moved through the House, including how the Department of Revenue was unable to provide certain information when the bill was brought before committee.
“Given the short notice they were given, however, they could not give the Budget Committee any information about what we could tell our constituent taxpayers to expect. Had we made this a refundable tax credit, we would know that,” Burnett said.
Even taxpayers who paid at or more than $500 or $1,000 in taxes are not guaranteed to see that total amount because of the billion-dollar limit on the total amount of credits.
Because of that cap, said Rep. Peter Merideth, D-St. Louis, the amount going to each household could be diluted further.
“Once everybody actually qualifies for it is considered and budget and planning does the breakdown of how many people will qualify, it actually ends up lowering that top amount to $387,” Merideth said.
The bill now goes to the Senate, with three weeks left to go in the legislative session. When asked if the legislation was something the Senate could pass, Senate Majority Leader Caleb Rowden, R-Columbia, said that while the idea of giving money back to Missouri residents was not a bad idea, how to do it was still up for debate.
Follow Sarah Kellogg on Twitter: @sarahkkellogg