Norquist touts Missouri tax cut; schools concerned

DAVID A. LIEB Associated Press

JEFFERSON CITY, Mo. (AP) – Anti-tax crusader Grover Norquist traveled across Missouri in support of an income tax cut Monday as business and education groups stoked a long-smoldering battle over a tax cut promoted as an economic benefit and criticized as harmful to schools.

This week, Democratic Gov. Jay Nixon is likely to veto for the second time in as many years the tax cut passed by the Republican-led Legislature. But Republicans are vowing to try to override the veto, and they appear to have a better shot at success than last year.

With a veto showdown looming, Norquist rallied support for the tax cut by appearing with Republican House Speaker Tim Jones at news conferences in Cape Girardeau and Springfield.

“The tax cut will happen,” Norquist, the president of Americans for Tax Reform, predicted in an interview with The Associated Press.

“You’re going to have thousands and tens of thousands more people employed because of this,” Norquist added.

Like Missouri’s Republican lawmakers, Norquist contends that the tax cut will leave small businesses with more money that can be used to expand. But there are no official projections on whether the tax cut will create jobs or simply result in more money in people’s bank accounts.

While Nordquist traveled the state, business and education groups held dueling news conferences in Jefferson City criticizing or praising the measure. The scenario was reminiscent of last year’s highly publicized battle, when the GOP ultimately fell 15 votes short in the House of overriding Nixon’s veto.

This year’s measure is significantly less complex and smaller in scope.

A veto override requires a two-thirds vote of support by both chambers. Republicans hold a supermajority in the Senate. But because of several vacancies, House Republicans will need to vote as a block and pick up support from at least one Democrat for an override to succeed. One Democrat did support the tax cut when it passed the House earlier this month, but he has since said he is reconsidering his position.

The Missouri legislation would gradually cut the state’s top individual income tax rate to 6 percent from 5.5 percent and phase in a new 25 percent deduction for business income reported on personal tax returns. It also would expand an existing deduction for lower-income individuals and start indexing the tax brackets with inflation.

The incremental tax cuts would start in 2017, but would occur only if revenues grow by $150 million over the previous high mark from the previous three years.

Economists at the University of Missouri-Columbia have estimated that the tax cut legislation will eventually reduce state revenues by $620 million annually.

But Nixon raised concerns last week that the legislation could punch a $4.8 billion hole in the budget. He said the bill’s wording would eliminate taxes on all income over $9,000. Republicans contend that Nixon is misinterpreting the bill in order to manufacture a crisis and try justifying his veto.

Seizing on Nixon’s concerns, a coalition of education, mental health and senior citizen groups said Monday that the uncertain wording of the bill likely would spark a legal fight. They noted that Missouri already is underfunding its public schools this year by about $600 million, compared with what’s called for under a 2005 state law.

“There’s just no getting around the fact that tax cuts are going to mean less revenue for the state,” and thus likely for schools, said Brent Ghan, a spokesman for the Missouri School Boards’ Association.

That notion was disputed by businesses leaders who appeared at the Capitol with House Majority Leader John Diehl and other Republican lawmakers. Republicans have contended that the state can both cut taxes and continue to increase funding for schools.

“It’s time to stop the rhetoric – stop pitting businesses against education,” said Dan Mehan, president and CEO of the Missouri Chamber of Commerce and Industry. “That is a false key. We are not against education. This is about growing the economy.”


Tax cut bill is SB509.




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