Missouri governor doing all he can to sell lawmakers his $700 million tax cut plan – Missouri Independent
Missouri Gov. Mike Parson hopes to avoid any special session drama.
As he prepares to reconvene the legislature next month to debate a $700 million tax cut – with details of the plan expected to be announced as early as this week – Parson hopes to avoid the pitfalls that undermined a pair of special sessions he called in 2020.
It also navigates a long-running tension between his office and the Missouri Houseas well as a flammable State Senate with The resentment of the Republicans still smolders after a bitter 2022 legislative session and contentious GOP primaries.
The governor spent much of August trying to sell his proposal to fellow Republicans, taking regional rallies with GOP lawmakers around the state and one-on-one discussions with Republican senators.
Last Friday, he attended the Missouri House GOP summer caucus in Branson.
“I think all the meetings are going positively,” Parson told reporters earlier this month, later adding, “Making the biggest tax cut in Missouri history, and still being able to maintain education, health care, all the things we do, we have to get there.”
The governor also enlisted the help of one of the state’s most vocal champions of tax cuts, Rex Sinquefield.
Parson’s office has asked Sinquefield — by far the state’s most prolific donor, having doled out $40 million to Missouri candidates and causes since 2021 — to meet with lawmakers to discuss tax cut policy. .
In meetings with the governor and legislative leaders, Sinquefield brought in conservative economist Art Laffer, who is credited as the architect of the controversial Kansas tax cut package which was finally repealed after years of budget deficits.
A Sinquefield spokesperson could not be reached for comment.
On Tuesday, Parson’s sales pitch moved on to Senate Democrats, whom he met in his Missouri Capitol office for a discussion of his proposal.
Senate Minority Leader John Rizzo, D-Independence, said his party is not shy about cutting taxes, noting that Democrats backed a tax cut bill signed into law 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 much of the state’s budget surplus comes from one-time federal stimulus funds.
“We have a lot of good programs that we’re trying to keep going,” Rizzo said, pointing to efforts to raise teacher salaries, fund school transportation and address staffing shortages that have plagued agencies. of state.
“Our concern,” Rizzo said, “is that when the federal money runs out, these permanent tax cuts will be more detrimental to the budget than we can currently realize.”
Parson’s plan is to lower the state’s top tax rate to 4.8% from 5.4%. In addition to cutting the top tax rate, the governor hopes to increase the standard deduction to ensure a Missourian earning $16,000 or less owes no state income tax.
The estimated cost of the changes is approximately $700 million.
The governor announced plans to call lawmakers into a special session in May after vetoing a $500 million legislative proposal to send tax refund checks worth up to $500 to people earning a maximum of $150,000.
In his veto letter, he argued that the plan was well-intentioned but left out low- and high-income Missourians and did not provide permanent relief.
To bolster his case, Parson pointed to Missouri’s huge budget surplus. When the new fiscal year began on July 1, Missouri had more money than ever before, with a general revenue balance of nearly $4.9 billion.
Higher salaries, historic inflation and an influx of federal funds have contributed to the swelling of the state budget.
Also on the agenda for the special session are a set of farm tax credits that Parson vetoed in May. The $40 million tax credit legislation approved by lawmakers included incentives for biofuel makers, meat packers and young farmers, among others.
The governor vetoed the bill because the tax credits would have expired in two years. He wants a six-year extension.
In late 2020, Parson called lawmakers into special session twice — once to focus on crime prevention, then later to allocate federal COVID relief funds.
September 2020 crime special session failed after lawmakers adjourned without passing most of the governor’s priorities. Lawmakers approved funding for the CARES Act two months later, but faced with resistance, the governor had to abandon his proposal 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 that is crucial to funding Missouri’s Medicaid program.
Parson declined to call lawmakers back to Jefferson City to redraw congressional maps of the state last year, a move that ultimately heightened tensions in the Missouri Senate as the GOP leadership and conservative caucus clashed for months over what the redistricting plan should look like.
Ongoing animosity in the Missouri Senate weighs on plans for a special session, even as the Conservative caucus publicly announced on Monday it was dissolving.
“I have yet to see a special session go smoothly since I’ve been in the Senate,” Rizzo said. “You’re also bringing in people who have just gone to a pretty contentious primary. I mean, it was more like open warfare for the soul of the Republican Party all summer long. And you’re going to bring back people who are already having problems at the start to pull in one direction? I will believe it when I see it.