JEFFERSON CITY, Mo. (AP) — Gov.Jay Nixon
indicated Friday that he is likely to veto legislation that would cut Missouri's income taxes for businesses and individuals, saying he has serious concerns that it could jeopardize funding for essential government services.
Meantime, House Speaker Tim Jones told reporters there’s a good chance the GOP-led General Assembly will override any Nixon veto.
The Democratic governor criticized the tax-cut plan just a day after it won final approval from a Republican-led Legislature that touted it as a means of remaining economically competitive in a battle for businesses with Kansas and other bordering states.
The legislation would phase-in a 50 percent deduction over five years for business income reported on individual income tax returns. It also would gradually cut Missouri's corporate income tax rate nearly in half over and lower the top tax rate for individuals from 6 percent to 5.5 percent over the next decade.
The corporate and individual tax rate reductions would take effect only if annual state revenues continue to grow by at least $100 million over their highest point in the preceding three years.
Legislative researchers have estimated that the measure would reduce Missouri's potential revenues by about $700 million annually when fully implemented. The nonprofit Missouri Budget Project, which analyzes fiscal issues and has opposed the income tax cut, has estimated the eventual cost at more than $800 million annually. Nixon adopted the higher cost estimate in his remarks Friday.
"Taking more than $800 million — literally the equivalent of what you spend on higher education, or literally more than you have for all of corrections or mental health — is not the fiscally responsible approach," Nixon said.