Win or lose, Missouri Republicans want a vote on tax cuts.
From the moment Gov. Jay Nixon vetoed a roughly $700 million tax proposal passed by a GOP-dominated General Assembly earlier this year, legislative leaders have scrambled to muster enough support for an override.
But week after week in events around the state, Nixon, a Democrat, rallied opposition and assailed the proposal as “an ill-conceived, fiscally irresponsible experiment.” In the process, a few GOP lawmakers who originally supported the measure got cold feet.
Now, with the campaign entering its final weeks, Republicans still don’t know whether they have enough votes to override Nixon’s veto when they return to the Capitol on Sept. 11. But even if they come up short, House Speaker Tim Jones says he owes it to the voters who gave the GOP veto-proof supermajorities in the House and Senate to bring the bill up for a vote, regardless of the expected outcome.
“It’s too close to call at this point,” said Jones, a Eureka Republican. “If you’re a Republican, you have a very hard decision to make about whether you want to support something that is a central plank of our party — reducing taxes — or whether you want to stand with the governor.”
House Republicans gathered over the weekend in St. Louis for their annual summer caucus to discuss the governor’s vetoes and gauge support for any overrides. Rep. T.J. Berry, a Kearney Republican who sponsored the tax-cut bill, said he emerged from the gathering emboldened.
“I think support is solidifying,” Berry said. “Is it a slam dunk? No, but I think we’re very close.”
All along, Republicans knew the success of an override would come down to a handful of votes in the House. The Senate already has enough votes to override the veto.
Republicans hold 109 seats in the House, which is the exact number needed for an override. Three of those members voted against the bill when it first passed in April, and four others who originally supported the bill have since expressed doubts, mostly hinging on its potential impact on funding for public schools and higher education.
“But there are no hard ‘noes’ on this issue,” Jones said. “There are several people with concerns, but that doesn’t mean they are a going to vote ‘no.’”
Aimed as a response to massive tax cuts enacted in Kansas, the lawmakers approved a bill that would gradually cut taxes on corporations and other businesses in half. Additionally, the top individual tax rate would drop to 5.5 percent from 6 percent over the next decade.
The reductions to the corporate and individual tax rates would kick in only if state revenues grow each year by at least $100 million. The five-year phase-in of a 50 percent tax cut for businesses that “pass through” their income to the owner’s tax return would go into effect automatically regardless of state revenues.
Legislative researchers estimate the eventual cost, when fully phased in, would be $692 million a year.
If the proposal is implemented, a family of four earning roughly $48,000 a year would see about $5 in savings the first year. By contrast, a family of two with $225,000 in business income would see $1,000 in savings.
Critics point to these figures as proof that the bill disproportionately favors the wealthy. They say such meager savings won’t do much for individuals, but the resulting budget shortfalls would put essential state services such as public education at risk. Adding to critics’ concerns is an apparent error in the bill that would repeal a sales-tax exemption for prescription drugs that could cost consumers an estimated $200 million annually.
“It helps the rich, and it hurts or does little or nothing for the middle or lower class,” said Jim Moody, who was budget director for Republican Gov. John Ashcroft. “For the middle or lower classes, they’re going to be better off getting services that will be cut because of this than getting the miniscule cut.”
Supporters of the bill counter that Missouri must keep up with states such as Kansas and Oklahoma that have slashed taxes in recent years. And with nearly $2.5 million worth of donations from retired St. Louis financier Rex Sinquefield, groups advocating for the bill have run TV and radio ads all summer to advance their message.
“Lowering the tax burden on the job creators and small-business owners drives economic growth, provides more economic freedom and provides more opportunity for all Missourians,” Jones said.
Republicans who help the governor kill this tax-cut bill would do so at their own political peril, Jones said.
“There won’t be ramifications from the speaker’s office,” Jones said. “The ramifications will come from the Republican voters who sent us here to lower their taxes.”
But it isn’t just legislative leaders pressuring wavering Republicans. On the other side of the issue, they are feeling the heat from their local school districts. School boards around Missouri have passed resolutions in support of Nixon’s veto, and the coalition of groups campaigning against an override includes organizations representing teachers and school administrators.
Taxes won’t be the only topic when lawmakers return to Jefferson City next month. Jones said he is considering calling a vote for every bill Nixon vetoed — from gun laws to unemployment benefits.
“This isn’t going to be like most veto sessions we’ve had where we show up for one day,” Berry said. “I think we’re going to be (in Jefferson City) for a while, and we will do a lot of work.”