JEFFERSON CITY, Mo. — Looking to drum up support for a veto, Gov. Jay Nixon dispatched top administration brass today to tell reporters that a provision of the tax cut bill on his desk would eliminate 97 percent of all income taxes and reduce the state’s general revenue budget by 65 percent. Republican leadership were quick to counter that the charge was “laughable.”
Nixon’s Budget Director, Linda Lueberring and general counsel Ted Ardini, told reporters that a sentence in SB509, a tax cut bill waiting for a signature or veto from the governor, would eliminate all taxable income above $9,000, effectively wiping out the state’s budget.
Republican House Majority Leader John Diehl said the charge was “laughable,” and that Nixon was resorting to “a typical pattern of fear tactics” to fight “common sense” tax cuts.
Nixon’s office rolled out a legal opinion from Washington University School of Law Professor Cheryl D. Block backing their claim. Republicans quickly distributed a legal analysis of the bill from former Missouri Supreme Court Justice William Ray Price Jr., which addresses the provision in question and states that Missouri courts would likely side with Republicans.
At the center of debate is Section 143.011.2(4), RSMo., which states: “The director of the department of revenue shall, by rule, adjust the tax tables under subsection 1 of this section to effectuate the provisions of this subsection. The bracket for income subject to the top rate of tax shall be eliminated once the top rate of tax has been reduced to five and one-half percent.” (emphasis added.)
The second sentence, Nixon says, would eliminate the top tax bracket in Missouri, which is all income more than $9,000. But Price Jr., contends that, read as a whole, the section simply calls for tax brackets to be adjusted to reflect a new, lower tax rate. Under SB509, the top rate would be 5.5 percent when fully implemented.
Diehl said the section simply adjusts the top bracket to 5.5 percent when fully implemented and that Nixon is “grasping at straws.”
“He’s taking the line out of context to make it seem like we’ve made an error or eliminated something,” Diehl said. “It’s an unfortunate pattern we’ve seen, but it’s not going to scare off lawmakers and it’s not going to fool Missourians either.”
Block’s opinion calls the section “awkwardly worded” and says it “appears to completely eliminate the top state personal income tax bracket.”
Nixon spent the remainder of the day at events across the state to call out the so-called “error” in SB509 while Republican lawmakers met with reporters to chide Nixon for “fear tactics.”
Nixon is expected to veto the bill, but will not veto it today, according to his office.