Missouri faces a potential downgrade in its credit rating, Gov. Jay Nixon said Monday, if his veto of a tax cut package is overturned.
At a news conference in downtown Kansas City, Nixon cited notices from three credit rating agencies — Standard & Poor’s, Moody’s and Fitch — all of which, he said, hinted at downgrades if the tax measure becomes law.
“The General Assembly can and must step back from this ledge,” Nixon told reporters.
Supporters of the tax cut dismissed his concerns.
“Gov. Nixon continues to employ unfounded scare tactics to divert attention away from the importance of passing into law the first state income tax reduction in nearly 100 years, while at the same time ignoring the very real threat of doing nothing,” said a statement from Anne Marie Moy, a spokeswoman for Grow Missouri.
Nixon, a Democrat, has traveled the state for weeks, warning of problems he sees with the tax cut package passed by the Republican legislature this spring. He says it would cost the state $800 million in revenue, a figure many Republicans dispute.
Lawmakers will meet in September to consider the tax cut veto.
Missouri’s credit is rated AAA by Standard and Poor’s, a rating it has held for at least a decade.
Nixon said a downgrade could increase the cost of borrowing for the state, and for local governments, as well as make Missouri less attractive for businesses.
Kansas’ S & P credit rating remains at AA+ for most debt, although one agency recently downgraded some of the state’s previously issued debt because of concerns about the state’s recent tax cuts.