Missouri Gov. Urges Lawmakers to Persuade His $700 Million Tax Cut Plan • Missouri Independent – Missouri Independent | Vette Leader

Missouri Gov. Mike Parson is hoping to avoid special session drama.

As he prepares to reconvene the Legislature next month to discuss a $700 million tax cut — with details of the plan expected to be announced as early as this week — Parson is hoping to avoid these pitfalls avoid undermined two special sessions he called in 2020.

He also navigates longstanding tensions between his office and the Missouri Houseas well as a combustible State Senate with hard feelings among Republicans still simmering after a bitter 2022 legislative session and contentious GOP primary.

The governor spent much of August selling and holding his proposal to his Republicans regional assemblies with GOP legislators across the state and one-on-one meetings with Republican senators.

Last Friday he attended the Missouri House GOP summer convention in Branson.

“I think all meetings are going well,” Parson said told reporters He later added earlier this month, “To do the biggest tax cut in Missouri history and still be able to keep up education, health care and all the things that we do, we have to make it.”

The governor has also reached out to one of the state’s most vocal advocates for tax cuts, Rex Sinquefield, for help.

Parsons’ office asked Sinquefield — by far the state’s most prolific donor, having distributed $40 million to Missouri candidates and causes since 2012 — to meet with lawmakers to discuss the tax cut policy.

For meetings with the governor and legislative leaders, Sinquefield brought with him conservative economist Art Laffer, who is seen as the leader Architect of controversial Kansas tax cut package that was eventually rescinded after years of the budget gap.

A Sinquefield spokesman could not be reached for comment.

On Tuesday, Parsons transitioned the sales pitch to Senate Democrats, whom he met in his office in the Missouri Capitol.

Senate Minority Leader John Rizzo, D-Independence, said his party had no qualms about cutting taxes, noting that Democrats supported a tax-cut bill signed last year.

But he wonders if it’s time for another tax cut when the state has so many ongoing needs that are underfunded. Especially, Rizzo said, when a large portion of the state’s budget surplus comes from one-off federal stimulus funds.

“We have a lot of good programs that we want to make sure they continue,” Rizzo said, citing efforts to increase teachers’ salaries, fund school transportation and deal with the staff shortages that have plagued state agencies.

“Our concern,” Rizzo said, “is that when federal money runs out, these permanent tax cuts will hurt the budget more than we can realize right now.”

Parson plans to lower the state’s top tax rate from 5.4% to 4.8%. In addition to lowering the top income tax rate, the governor hopes to increase the standard deduction to ensure that a Missourian earning $16,000 or less owes no state income tax at all.

The estimated cost of the changes is around $700 million.

The governor announced his intention to call lawmakers to a special session in May after vetoing a $500 million bill to send tax refund checks worth up to $500 to people who max Earn $150,000.

In his veto letter, he argued that the plan was well intentioned left out both lower- and higher-income Missourians and brought no lasting relief.

To bolster his case, Parson has pointed to Missouri’s massive budget surplus. As the new fiscal year began on July 1, Missouri had more cash to spend than ever before an overall revenue balance of nearly $4.9 billion.

Higher wages, historic inflation and an influx of federal funds contributed to the bulging state budget.

Also on the agenda for the special session will be a farm tax credit package, the Parson vetoed it in May. The $40 million tax credit law, approved by the Legislature, included incentives for biofuel producers, meat packers and young farmers, among others.

The governor vetoed the bill because the tax credits would expire in two years. He wants a six-year extension.

In late 2020, Parson called the legislature into special session twice — once to focus on crime prevention and later to allocate federal COVID-related resources.

The September 2020 special session on crime fizzled after lawmakers adjourned without passing most of the governor’s priorities. Legislature approved funding for the CARES Act two months later, but faced opposition from the governor had to give up his suggestion to protect businesses from certain COVID-related lawsuits.

Since then, Parson has been reluctant to call special sessions, with the exception of last summer to renew a tax on hospitals critical to funding Missouri’s Medicaid program.

Parson last year refused to call lawmakers back to Jefferson City to redraw the state’s congressional maps, a decision that ultimately increased tensions in the Missouri Senate as GOP leadership and the conservative faction argued for months about what the redistribution plan should look like.

Continued hostility in the Missouri Senate hangs over plans for a special session, though the conservative caucus publicly announced on Monday it dissolved.

“I haven’t seen a special session run smoothly since I’ve been in the Senate,” Rizzo said. “They’re also bringing back people who’ve just come out of quite a controversial elementary school. I mean, it’s been a pretty open war for the soul of the Republican Party all summer. And you’re going to get people who are already struggling to move back in one direction? I believe it when I see it.”

CORRECTION: This story has been updated to show that Rex Sinquefield has donated $40 million since 2012.

Leave a Comment