Government & Politics

Top-ranking Missouri Republican says probe into state tax refund issues will continue

House Speaker Elijah Haahr, R-Springfield, appointed a special oversight committee to look at the issue.
House Speaker Elijah Haahr, R-Springfield, appointed a special oversight committee to look at the issue. House Communications

The highest-ranking Republican in the Missouri House says the legislature will continue its investigation into how Gov. Mike Parson’s department of revenue handled tax code changes that reduced or eliminated refunds for thousands of Missouri taxpayers.

Last week, Democratic Auditor Nicole Galloway released a report stating that Parson’s department of revenue didn’t follow state law when it revised withholding tables in January without first proposing a regulation change.

Galloway said the change will mean more money will be withheld by the state from Missourians’ paychecks.

In an email to The Star, Missouri House Speaker Elijah Haahr noted that three months ago, he appointed a special oversight committee to “thoroughly review much of what the auditor shared in her report.”

“I fully anticipate the oversight committee will continue its hard work of being the watchdog of the unelected departments of the executive branch by having additional hearings relating to (the department of revenue),” said Haahr, R-Springfield.

Galloway’s audit came after months of bipartisan criticism from state lawmakers who say the department of revenue did not properly warn taxpayers about changes made to the tax tables in March and October last year that could mean smaller refunds or higher-than-expected bills when they file this year.

The growing legislative criticism eventually contributed to the resignation of Department of Revenue Director Joel Walters last month.

In January, the state again adjusted the tax tables, a move that Galloway said should have been approved through the legislature’s Joint Committee on Administrative Rules so that there would be a public comment and notice period.

Parson, a Republican, has slammed the GOP-led legislative inquiry, calling it “political grandstanding.” In response to Galloway’s audit, Parson asked Republican state Treasurer Scott Fitzpatrick to review the issue.

In a letter to the governor that was also provided to members of the legislature, Fitzpatrick wrote that the department was trying to navigate a system that’s been broken since 1993.

The department was correct, Fitzpatrick wrote, to not follow outdated rules. He also noted previous changes to the tax tables made since 1993 did not follow state law.

“Had the department implemented the withholding instructions pursuant to these antiquated regulations, the result would have been incompatible with current tax law and would have resulted in substantial under withholding,” Fitzpatrick wrote.

Galloway took Fitzpatrick’s review as vindication, saying Friday that the treasurer agrees that Parson’s department of revenue “ignored the legal process.”

House Minority Leader Crystal Quade, D-Springfield, said that the department must follow a certain process when determining “how much money to take out of Missourians’ paychecks. That process was not followed and no amount of rationalization by the treasurer or the rest of administration will change that.”

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Jason Hancock is The Star’s lead political reporter, providing coverage of government and politics on both sides of the state line. A three-time National Headliner Award winner, he has written about politics for more than a decade for news organizations across the Midwest.