When the state legislature’s new session begins today (Jan. 8) in Jefferson City, Republican Sen. Will Kraus of Lee’s Summit will once again be on the front line of a proposed tax cut bill.
The latest bill is similar to a bill filed last year that would have provided a state tax cut for which Missouri Governor Jay Nixon vetoed. After a failed override of Nixon’s veto last September, Kraus said he would address the tax cut until it is passed and he re-enforced the stance Jan. 6 in an interview with the Journal.
“I think Missouri needs to be more competitive in tracking and keeping businesses in Missouri,” Kraus said via phone of the latest proposal, Senate Bill 509. In September, the Missouri House of Representatives voted 94-67 in favor of an override to the governor’s veto of House Bill 253. The override needed a two-thirds majority to advance to the Senate and fell 15 votes shy. “If you look at Missouri’s growth over the last decade, it’s behind the national average. We need more attraction to bring more jobs and businesses to Missouri.”
The latest proposed tax cut would phase in a 50 percent deduction for business income reported on individual income tax returns over five years as well as gradually cut the state’s top individual income tax rate of 6 percent to 5 percent over a decade. Each year’s reduction would take place only if yearly state revenue grows by at least $100 million, Kraus said.
The bill would also increase an existing $2,100 personal deduction on income taxes by $1,000 for individuals who earn less than $20,000 of adjusted gross income. Once fully phased in, Kraus estimated that the annual cost of the bill would be more than $1 billion.
“I believe strongly that Missouri needs to grow our tax base,” Kraus said. “To grow our revenues we have to be more competitive in attracting jobs. We continually fall behind and we lose more and more population and jobs.”
Opponents of the bill have been vocal about their opposition all across the state. Here in Lee’s Summit, the R-7 school district has publicly stated a tax cut would hurt an already under-funded state education budget.
The district had no comment on Kraus’s latest proposal, but in response to the failed proposal last year, the district’s superintendent, David McGehee, said the district was pleased to see the final outcome.
“(The district has) been troubled for some time about how the dramatic losses of revenue would impact our schools in Lee’s Summit R-7 and across the state,” McGehee said then. “We are encouraging education supporters to be diligent in the future as it appears likely that similar legislation will be introduced during the spring 2014 General Assembly session. We will continue to communicate with the legislators who represent our community in an effort to convince them to protect our schools and school funding and to steer clear of legislation that places an increased burden on the middle class.”
According to the R-7 district, the state’s attorney general ruled that if the General Assembly had been successful in a veto override of House Bill 253, Missouri would have lost up to $1.2 billion. The district itself would have lost approximately $5 million annually and up to $8.5 million annually with the combination of the veto override and the pending passage of the national Fair Market Place Act.
As far as the latest proposal, much remains to be seen with Senate Bill 509 as the legislation moves forward.
“I don’t believe a lot of Democrats will support a tax cut because they just in general want more revenue,” Kraus said. “I don’t believe a lot of them will support it. The question is, can we get a vote in the Senate and then can we get the Governor to potentially sign it? I give it a 50-50 shot right now.”