Editorials

If lawmakers keep cutting taxes, how can Missouri fund basic services?

The lights come up as the sun fades on the capital building downtown Jefferson City Missouri
The lights come up as the sun fades on the capital building downtown Jefferson City Missouri Photo illustration

As 2019 nears, Missouri has a problem: It has outsized needs and not enough money to pay for them.

A new report says $1.5 billion should be spent to fix up aging buildings on university and college campuses. Vulnerable kids need more support. Missouri highways continue to fall behind on basic maintenance to the tune of $825 million a year.

And yet, the reaction of conservative Missouri lawmakers over the years has been to cut taxes and cut them again. That may sell during election years, but it amounts to a gross dereliction of duty when it comes to fulfilling their official obligations.

In fact, the Missouri Budget Project, a liberal-leaning think tank based in St. Louis, has determined that between 1993 and 2013, state lawmakers passed 20 different tax cuts that, when combined, are costing the state more than $1 billion a year. To be sure, Democrats were in charge of the state House and Senate until the early part of this century, when a significant chunk of those cuts were enacted.

Still, the tax cut drumbeat has continued in recent years with cuts to corporate and income taxes, as well as to LLCs.

“By nearly every measure, Missouri invests less in critical public services today than it did three decades ago,” the Budget Project concluded in a January report.

To demand that a Republican-dominated General Assembly reverse course and reconsider some of these cuts might amount to a big waste of digital ink. And yet, that’s exactly what legislators must do. So consider this editorial a down payment on what will ultimately become a long campaign of persuasion.

A similar effort wound up working in Kansas, although it took years after lawmakers there signed off on former Gov. Sam Brownback’s disastrous tax cuts that wound up causing so much pain. If Missouri lawmakers were wise, they would consider the lessons of Kansas. Brownback, of course, is gone now, widely viewed as a failed governor. A Democrat is taking over the governor’s office.

That’s exactly what could happen in Missouri unless Republicans get real about the genuine needs of the state.

The two big fiscal culprits in Missouri are a corporate tax cut that reduced tax collections from $436 million in fiscal 2015 to $276 million in fiscal 2017, and another measure that’s phasing in cuts to income tax rates and pass-through deductions for LLCs. The income and LLC reductions could eventually cost the state $400 million a year, although lawmakers have taken steps to reduce their cost.

The comparisons to Kansas continue. Both states cut individual income tax rates. Both cut taxes for LLCs in an effort to create jobs. Both states included “trigger” mechanisms aimed at softening the blow.

And yet, Missouri remains determined to walk down a road that’s oh so familiar.

“Every year it’s a struggle,” Amy Blouin, executive director of the Budget Project, said of the state spending blueprint. “It’s a debate about which of our needs will be reduced.”

Never mind the fairness issue. It’s the same old story: The tax cuts weren’t targeted at the poor and the people who would really benefit from relief. Wealthy individuals and corporations will reap the greatest advantages.

“There’s a real fairness issue,” Blouin said.

She and others want lawmakers to restructure the tax code to make it more equitable. Taxes and tax fairness should be on the to-do list for next year’s General Assembly.

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