As expected, Missouri Gov. Jay Nixon on Thursday vetoed a major tax-cut bill.
One reason: Kansas.
Nixon, a Democrat, looked westward to the 2012 decision by Kansas lawmakers to slash taxes as a big reason why Missouri shouldn’t follow suit. On Thursday, in a move that proved fortuitous for Nixon’s argument, Moody’s Investors Service downgraded Kansas’ bond rating.
Said Nixon in a statement: “In their rush to follow Kansas down the fiscally irresponsible path of eliminating ‘pass-through’ income for businesses, the General Assembly seems determined to put Missouri’s spotless AAA credit rating at risk.
“It’s time to set aside the partisan blinders and look at the evidence: fiscal experiments like Senate Bill 509 do nothing to grow the economy and in fact, cause it great harm.”
In a statement, Nixon quoted the rationale the Moody’s used to downgrade Kansas’ bonds:
“The downgrade reflects Kansas' relatively sluggish recovery compared with its peers, the use of non-recurring measures to balance the budget, revenue reductions (resulting from tax cuts) which have not been fully offset by recurring spending cuts, and an underfunded retirement system for which the state is not making actually required contributions.”
Nixon pointed out that Missouri has a perfect AAA credit rating from all three leading credit rating agencies – Moody’s, Fitch Ratings and Standard & Poor’s.