Special breaks and exemptions would place greater burden on average taxpayers
By TIM ROWDEN
Jefferson City – Gov. Jay Nixon, on June 11, vetoed legislation containing more than a dozen special interest breaks and exemptions passed in the final hours of the legislative session.
These carve-outs would reduce state and local revenues by up to $776 million annually and were not accounted for in the Fiscal Year 2015 budget passed by the legislature or in the budgets of the local jurisdictions they would impact.
In a letter addressed to members of the General Assembly, the Governor faulted the legislature for ignoring the legislative process and adding new loopholes to the tax code that will shift a greater tax burden to average taxpayers.
“These special breaks and exemptions for a handful of special interests are the result of a deeply flawed process and a fundamentally misguided approach to tax policy,” Nixon said.
“Many of the most costly provisions were slipped into bills without a public hearing or even a fiscal note, and none of these giveaways were accounted for in the budget the legislature sent to my desk or in the local budgets of the jurisdictions they would impact.”
REDUCED FUNDING FOR PUBLIC SERVICES
Most of the provisions would impact sales tax collections, reducing local tax revenues that support police, fire, ambulance, emergency services, parks, children’s services and other public services provided at the local level.
Nixon said the loss of local revenue could also impact repayment of voter-approved bonds issued to finance capital improvements such as county jails, county hospitals, fire stations, emergency management centers, road projects and other critical public infrastructure.
FLOUTING WILL OF THE VOTERS
“These special carve outs and loopholes would undermine local public services and flout the will of voters by eroding revenues that support services like firefighters and cops, libraries and ambulance services, snow plows and health inspectors, public transit and road repair,” Nixon said.
“From storm water management in West Plains to fire protection in Webster Groves, voters in communities across Missouri have come together to pass local sales taxes to support local public services and capital improvements. These special breaks passed by the General Assembly would siphon these voter-approved resources away from their intended purpose, and into the pockets of the well-connected.”
REDUCED FUNDING FOR EDUCATION
The reduced state sales tax revenue would also reduce funding from dedicated sales taxes for K-12 schools (also called the Proposition C sales tax), highways, conservation, state parks, and soil and water conservation programs.
Senate Bill 693, which would reduce state and local highway funding by more than $30 million annually, was passed just two days after legislators sent to the ballot a ¾-cent sales tax to increase funding for transportation.
“Instead of engaging in an open and honest debate about the overall tax policy of our state, the legislature has once again opted for an undisciplined, scattershot approach by adding more loopholes to the already dizzying array of carve-outs that riddle our tax code,” Nixon said, adding that his vetoes were intended to restore “fiscal sanity” to the budget process.
The General Assembly will have an opportunity to override the Governor’s vetoes when it meets again in September.
Bills the Governor vetoed
Gov. Jay Nixon vetoed 10 bills aimed at providing breaks and exemptions to special interests at the expense of state programs and public services.
Here are the bills he vetoed:
- Senate Bill 693 – exempts from state and local sales tax certain used vehicles and rights of first refusal for tickets sold at the Sprint Center in Kansas City, and would expand the Wine and Grape Production Tax Credit.
- Senate Bill 584 – exempts from state and local sales tax items used in the storage or processing of data in any form, items used in the generation, transmission, distribution, sale or furnishing of electricity by power companies, and certain fees paid to places of recreation.
- House Bill 1865 – creates new exemptions from state sales taxes for the cost of utilities used by restaurants, grocery stores, convenience stores, fast food restaurants and other facilities engaged in food preparation.
- Senate Bill 612 – exempts commercial laundries and dry cleaners from state and local sales taxes on various purchases, and would waive tax liability for certain business.
- Senate Bill 860 – would enable a purchaser to obtain a sales or use tax refund, even when they have current tax delinquencies.
- House Bill 1296 – authorizes certain corporations to utilize an alternative method of determining the amount of their income that is derived in Missouri and would add graphing calculators to the back to school sales tax holiday.
- Senate Bill 727 – exempts certain items purchased from some, but not all, farmers’ market vendors from state and local sales and use taxes.
- Senate Bill 662 – waives tax liability for certain businesses and would exempt from sales tax rights of first refusal for tickets sold at the Sprint Center in Kansas City.
- House Bill 1455 – allows a business to claim a sales tax exemption without requiring it to prove eligibility for the exemption.
- Senate Bill 829 – duplicate legislation to House Bill 1455.