Tax-cut fever is alive and well in Missouri and Kansas.
Never mind that both states face enormous needs totaling hundreds of millions of dollars in the coming years: Missouri with its underfunded highway system and Kansas with its well-publicized school finance mess. And that’s only the beginning of a very long list of needs. Yet Republican lawmakers in the two states are looking seriously at major tax cuts as their legislative sessions wind down.
That this idea makes little sense goes without saying. That this is an election year begins to explain things. In Missouri, lawmakers are desperate to distract attention from Gov. Eric Greitens’ ongoing legal issues. In Kansas, the ruling GOP is looking for traction following former Gov. Sam Brownback’s troubled tenure.
The Missouri Senate last month gave first-round approval to sweeping tax cuts costing $500 million to $800 million a year. The measure’s sponsor, state Sen. Bill Eigel, a Weldon Spring Republican, calls it the largest cut in state history. The legislation also would provide a modest boost to the state gasoline tax, which lawmakers haven’t raised since 1992.
Eigel insists his measure would prevent a Kansas-style financial meltdown because he ties his cuts to state revenue increases. In other words, if revenues don’t rise, taxes don’t get cut. Critics question how effective that safeguard would be.
“This is like Kansas on steroids,” Amy Blouin, executive director of the Missouri Budget Project, has said.
The Missouri Senate has also passed a corporate tax cut measure that would chop that tax rate nearly in half. The price tag: $66 million annually.
All this comes in the wake of an income and business tax cut from 2014 that will take its first bite this year to the tune of $80 million. That amount could reach $200 million next year.
But Missouri faces a problem that Kansas does not. If Missouri finds itself in a persistent budget hole, it must go to the voters to approve a tax hike. That presents a challenge that Kansas lawmakers won’t encounter.
On Tuesday, the Missouri House passed a bill that Speaker Pro Tem Elijah Haahr, a Springfield Republican, sponsored that cuts individual and corporate taxes and also calls for the state to tax online purchases.
In Kansas, Republican legislators are again looking at tax cuts despite the havoc that Brownback’s reductions created. The intent, supporters say, is to return a tax windfall that could total hundreds of millions of dollars over the next few years because of federal tax code changes.
The measure has passed the Senate and carries a $141 million cost next year and about $80 million the following years.
Critics rightly point out that while the state may be able to scrape together enough money this year to make a down payment on a new school formula, tax increases are probably needed next year to pay for the court-ordered boost. Saving the windfall dollars only makes sense. If lawmakers in both states plunge ahead with tax cuts this year despite all these needs, they will be doing it for one chief reason: They need your votes in November.
As Missouri House Assistant Minority Leader Gina Mitten, a St. Louis Democrat, recently told Missourinet, “We’ve already talked about the fact that our public education is in trouble, our roads and bridges are in trouble, our seniors are in trouble, what more trouble do we need to put Missourians in just to win elections?”