Missouri lawmakers will return to Jefferson City on Sept. 6 for a special legislative session centered on taxes.
Gov. Mike Parson announced the start date of the session on Monday, less than two months after he first brought up his intention to call for one. How long the session will last is unknown, but it could go through the legislature’s annual veto session, which will occur on Sept. 14.
The session is aimed at addressing two vetoes issued by Parson this year. One was over a bill containing agricultural tax credit programs, while another involved a one-time, nonrefundable income tax credit to some qualified Missourians.
The governor wants a permanent income tax cut, as opposed to a one-time tax credit, citing both Missouri’s record unemployment rate and revenue surplus as reasons to do it.
“All this shows why now is the time for the largest income tax cut in our state's history. We can permanently cut Missourians' taxes by more than $700 million,” Parson said.
Tax measures Parson wants to see include a lowering of the top individual income tax rate from 5.3% to 4.8%. He also wants to increase the standard deduction for single and joint filers as well as eliminate the bottom income tax brackets.
“Meaning no one would pay tax on the first $1,000 of currently taxable income,” he said.
These measures combined mean Missourians who filed their taxes on their own would earn their first $16,000 tax free, or $32,000 for those who file jointly, Parson said.
The proposal has received criticism from Missouri Budget Project, a nonprofit public policy analysis organization.
In a statement released after Parson’s announcement, President and CEO Amy Blouin called the cuts irresponsible, saying the recent influx of temporary federal dollars is what has caused Missouri to have this much of a surplus.
“Quite simply, relying on the current surplus to fund permanent tax changes isn’t fiscally sustainable, or responsible, and will ultimately require cuts to state services,” Blouin said.
Blouin also said such a cut would also not help Missourians who earn too little money to even owe income taxes.
Parson said he did not consider federal money when deciding if the state would be able to afford such a tax cut, instead just judging by the state’s General Revenue.
“It will have no effect on the federal dollars that are coming in. Most of those are already marked for projects already,” Parson said.
In addition to the tax cut, Parson also wants the legislature to try again at passing a bill creating agriculture tax credit programs. The initial bill passed by the legislature this year had a sunset date of two years, which Parson did not believe was a long enough time.
“Eight times this past session, the General Assembly passed and I signed similar incentive programs with six-year sunsets, including for big companies and our cities and around the state,” Parson said. “And if these programs are good enough for six years, so are our programs that support [our] development in Missouri's agriculture industry.”
The governor wants both measures to be included into one bill as opposed to separate pieces of legislation.
Parson has spent the last couple of weeks meeting with Missouri lawmakers, both Democrats and Republicans, about the plan. He says some of the criticisms he has heard concerned not going far enough.
“What we can't do is make an omnibus tax bill, because we already know some of the things that some people would like to put in there can’t even get through the General Assembly now,” Parson said.
Rep. Richard Brown, D-Kansas City, said the figures Parson gave are promising, but he still has questions.
“With the lost revenues from state income tax, where do we make that money up? We still have to continue to pay bills for the state. So, I'd like to sit down with the governor and find out what his thinking is and where we're going from here,” Brown said.
A statement issued by House Speaker Rob Vescovo, R-Arnold, and House Majority Floor Leader and future Speaker Dean Plocher, R-Des Peres, said House members addressed these issues during the regular session and “stand ready to again work on these issues to help Missouri families in these challenging times.”
The bill will begin in the Senate.
Follow Sarah Kellogg on Twitter: @sarahkkellogg
