Nixon hints veto of Missouri tax cuts in border war with Kansas

05/10/2013 11:45 PM

05/20/2014 10:44 AM

Gov. Jay Nixon had harsh words Friday for a Republican-backed tax cut bill, hinting at a veto as he called the measure “fiscally irresponsible.”

The tax cuts, which the governor believes will end up costing the state more than $800 million, run the risk of undermining Missouri’s “strong fiscal foundation,” he said. Ultimately, Nixon believes the cuts could jeopardize the state’s ability to fund vital services.

“Taking more than $800 million out of our state budget — the equivalent of wiping out our entire budget for higher education, closing all our prisons or eliminating the Department of Mental Health — is not the fiscally responsible approach,” Nixon said at a Capitol press conference Friday morning.

Designed as a response to massive tax cuts enacted in Kansas, the legislation gradually cuts taxes on some businesses in half over five years. It also phases in cuts to individual and corporate taxes over 10 years, although those cuts would not go into effect unless state tax collections grow by at least $100 million each year.

When fully implemented in 2024, legislative researchers project the changes would reduce state revenues by $692 million annually.

But these tax cuts are needed, supporters argue, if Missouri wants to remain economically competitive with its neighbors and stave off a flood of businesses fleeing west across the state line in pursuit of lower taxes.

“Standing by while companies leave Missouri for Kansas is actually the fiscally irresponsible move,” said Sen. Will Kraus, a Lee’s Summit Republican who has championed the tax cuts this year. “And if we put more money into the pockets of individuals and businesses, our economy will grow and these tax cuts will pay for themselves.”

Nixon said he wasn’t ready to say definitively whether he would veto the bill or not, since “it’s not on my desk yet” and he hasn’t had a chance to thoroughly study it.

The prospects of successfully overriding a veto are unclear.

The House passed the legislation Thursday 103-51, with three Democrats in support and three Republicans in opposition. It takes 109 votes to override a veto.

Kraus points out that seven Republicans weren’t present for Thursday’s vote. However, a pair of those Republicans voted against previous versions of the tax cut bill.

“If it turns out we can’t get enough support to override the governor’s veto,” Kraus said, “I’ll be back again next year pushing for similar legislation.”

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