As a member of the House Ways and Means Committee, I have spent many hours in hearings on our state tax laws and Missouri’s tax code. I have studied the research extensively, and the overwhelming evidence supports the basic economic principle that lowering tax rates is directly associated with long-term and even rapid economic growth. Pro-growth policy, such as reducing individual as well as corporate income taxes, has proven successful in numerous other states during both normal economic times and in times of recession recovery. Reducing taxes enhances incentives for economic growth, investment, productivity, and employment. Philosophically, this was the reasoning behind the passage of House Bill 253. It was never the intent to harm nor to cut K-12 education, higher education, or other state programs, especially those programs that help people with disabilities and who cannot care for themselves. The purpose of this legislation was to create more revenue through the private sector by reducing the tax burden on our state’s citizens and allow them to keep a greater percentage of their own money. With all due respect to Governor Nixon and his office, I disagree with the position he has taken on HB 253, and I believe his actions are unnecessary. Withholding funding to these programs was the governor’s action, not the action of the legislature.
Because of the threat of a possible override of his veto of HB 253, the governor has withheld $400 million that the General Assembly already appropriated in the FY14 budget. This includes an additional $66 million for K-12 education, a $25 million increase for higher education, as well as other state government programs, and monies appropriated for people with various disabilities. What makes the governor’s decision to withhold the monies so difficult to understand is that as a state we have collected over $700 million in new tax revenues in the past year. This translates into a surplus of over $400 million for the state’s FY14 budget. In other words, after everything has been appropriated, including increases in education and other state programs, we still have a surplus of over $400 million going into FY14. You may be asking why K-12 education, higher education, and some people with disabilities are being held hostage by the governor when the money is there and has already been appropriated. This is a good question. To withhold monies from these people and groups is senseless and totally unnecessary in light of the financial situation in our state at this time.
In addition to being senseless and unnecessary, withholding appropriated funds by the governor may very well be unconstitutional. Article 4, section 7 of Missouri’s constitution states: “The governor…may reduce expenditures of the state for any of its agencies below their appropriations whenever the actual revenues are less than the revenue estimates upon which the appropriations were based.” Since our actual revenues are not lower but are, in fact, higher than budget requirements, it seems that perhaps the governor may be over-stepping his constitutional authority. In fairness to the governor, he has based his $400 million withhold on the potential passage of the Marketplace Fairness Act by the United States Congress. We are being told in the states that there is little possibility the act will even come to a vote in the U.S. House this year and if it does, it has little to no chance of being passed.
During the Legislative Session, it is about policy. During the Veto Session, it is about politics and not policy. As this year’s Veto Session approaches, it will be wise for all parties involved to take a step back, look at the facts, examine the different possibilities, and make an educated decision based upon reason and not rhetoric.