Several plans emerge as Missouri lawmakers begin special session of governor’s tax cuts Missouri Independent

The special legislative session called by Governor Mike Parson to cut income taxes began Wednesday, and as lawmakers adjourned for the day, one thing was clear — there is no agreement on a plan.

And that could upset the governor’s hopes of a speedy session.

In the state Senate, supposed to act first on the income tax cut sought by Parson, 10 bills providing income tax cuts were introduced, including one that cuts the tax on corporations while leaving personal income tax intact.

All but one of the bills were introduced by Republicans and include an immediate or future cut in the top tax rate. Senate Democratic Leader John Rizzo of Independence also introduced a bill, but his proposal would increase the value of a credit passed last year for low- and middle-income Missourians and make no changes to rates. of taxation.

A cut in the top tax rate means most of the money goes to high-income earners, Rizzo said.

“We’re going to start the conversation about how we can help Missouri families,” he said. “They’re going to start the conversation about how we help millionaires.”

Sen. Andrew Koenig, R-Manchester, who introduced a bill to immediately cut personal and corporate tax rates, said Rizzo’s proposal is a new welfare package.

“If you have a tax credit where you get more money than you put in, that’s welfare,” he said.

In the Missouri House, no income tax cut plan was introduced, but Rep. Brad Pollitt, R-Sedalia, proposed a bill with several tax incentives intended to supporting the economy in rural areas.

The state‘s general revenue fund is enjoying its largest-ever surplus, with $4.4 billion available at the end of August and growing 20% ​​so far for the fiscal year in prices, against an estimate of 2.1% made in January.

The state budget’s three main sources of general revenue are income taxes, which brought in $10 billion in the fiscal year that ended June 30; the sales tax, which brought in $2.7 billion; and corporate taxes, which totaled $900 million.

In June, Parson vetoed provisions of a spending bill this would have given rebates of up to $500 for each person reporting taxable income, with a total cost cap of $500 million. He said the plan doesn’t have enough money to fully fund the rebates and that the state should pass permanent legislation instead of sending out rebate checks.

Parson also vetoed a bill providing incentives for rural areas, saying the two-year lawmakers included in the legislation were impractical.

In his call for a special session, Parson asked lawmakers to cut the top personal income tax rate from 5.3% to 4.8%. He also called on lawmakers to put rural incentives in the bill and give them a six-year sunset.

The top tax rate has already been falling for several years under a phased reduction enacted in 2014 despite objections from the then government. Jay Nixon. The highest rate, 6% in 2014, is 5.3% this year.

Each additional milestone occurs after annual revenue growth exceeds $150 million.

There are currently five more reductions to come before the maximum rate stands at 4.8%. Parson’s plan speeds up the cut.

Koenig’s bill mirrors Parson’s plan for an immediate reduction, but adds additional triggered reductions if revenue growth continues. Koenig’s bill also cuts the corporate tax rate by half a point, from 4% to 3.5%, and also allows for a second reduction, to 3%, if the income trigger for a reduction personal income tax is reached.

The bill offers something for everyone, Koenig said.

“Every taxpayer would get a tax cut,” Koenig said. “If you make enough money to pay even a dollar in tax, you’ll get a tax cut.”

Sen. Lincoln Hough, R-Springfield, is proposing a competing plan that would offer immediate rebates this year and additional future tax cuts if state revenue growth remains strong.

Hough’s proposal would send rebates of $325 to individuals and $650 to married couples. The three additional triggered reductions would set the top tax rate at 4.5%.

But to get those three reductions, the trigger amount would be increased, requiring $250 million in annual revenue growth instead of the $150 million required by current law. In addition, this trigger amount would be indexed to inflation.

“It would provide immediate relief to families hit by inflation without bankrupting the state in the long run,” Houg said. “I want to build railings in there.”

Missouri has used excess funds to add spending on education, health care and other needed programs, noted Hough, who is expected to become chairman of the Senate Appropriations Committee next year.

“I don’t want us to have to cancel this,” he said.

Comments are closed.