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Behind the Scenes: The work involved in Senate Bill 26

   

By Ashley Jost

JEFFERSON CITY, Mo. — While Senate Bill 26 currently is out of his hands, Sen. Will Kraus, R-Kansas City, the bill’s sponsor, still actively follows its progress.

Sen. Will Kraus, R-Kansas City
Sen. Will Kraus, R-Kansas City

The work that went into the tax cut legislation goes a little deeper than anything Kraus has ever worked on, including months of research, public relations work, and conversations with leaders from both sides of the aisle in both chambers.

“I’m a small government guy,” Kraus said about his motivation to pursue SB26. “And, I’m a big believer in cutting taxes.”

Kraus said he and Mark Siettmann, his chief of staff who carried the brunt of the research legwork, worked during the interim for months trying to compare Missouri’s tax policy to neighboring states as well as states that showed growth in population and gross domestic product.

“It was very time consuming, including several months worth of research,” Siettmann said. “I can’t say I knew a lot about tax policy beforehand, so it wasn’t just learning the numbers, it was learning how they all fit.”

Kraus said his favorite part of the research was understanding where Missouri was in comparison to other states. He listed Tennessee as a state they found to be closest in size and scope that does not have an income tax at all.

Additionally, he said one of the first facts they noticed through research was how Missouri’s sales tax — not regional tax, just state sales tax — is lower compared to other states.

“We could easily raise our sales tax a whole point without getting close to the level of those around us,” he added.

Kraus said he thinks this bill has seen success so far because it’s “methodical” and is not a “jump-over-the-cliff” piece of legislation.

“Over a period of five years the impact is going to be there, but it’s not going to be so dramatic that it’s going to turn our budget upside down,” Kraus said. “That’s unlike Kansas, who did it all in one year. We’re going to do pieces of it every year over the next five [years].”

When the bill was still under construction in the Senate, Kraus said he spent a large amount of time trying to communicate with other senators to piece together legislation that could ultimately be agreed on.

He said he also spent a lot of time in the House during perfection to engage them early in the process, something he said Majority Floor Leader John Diehl and House Speaker Tim Jones seemed grateful for. Currently, he said his impression is they are happy with the way the bill turned out.

Within the Senate, Kraus said he worked hard to make sure Republicans as well as Democrats had a “seat at the table” while maintaining the bill’s tax rate cut status.

“Once we got the new substitute dropped, I got on the floor and announced that I would have printed copies for people that night if they wanted it,” he said. “I emailed everyone at another point saying I would be in the gallery for an hour to answer questions. Those kinds of things made it easier on the floor because people understood I was open and willing to discuss it. That being said, I was always clear this was going to be a tax cut bill. If there’s no tax cut, there’s no reason for it.”

Of the changes made to the bill that involved bringing in the minority voice includes the change by Sen. Scott Sifton, D-St. Louis County, from a 1 percent to a .75 percent cut for personal and corporate income taxes, as well as an additional deduction for those making less than $20,000 by Sen. Maria Chappelle-Nadal, D-St. Louis County.

“At the end of the day, this isn’t a bipartisan bill,” Kraus added. “But, everyone was involved in the final product.”

Sen. John Lamping, R-St. Louis, was one of the key advocates for SB26 and someone Kraus said was integral to the bill’s success.

“This was a concept I began working on last session and while it’s not the exact policy we would have liked to draft, it is a start in the right direction,” Lamping said.

Kraus pointed out that this would be one of the first tax rate cuts since 1929 when the tax rates were put into place. He said that if it were up to him, the only thing he would do differently would be completely ending the state’s income tax, phased out over 10 years.

“I’m not King for the day, so I can’t make that happen,” Kraus joked.

Travis Brown, the author of “How Money Walks,” said he thinks SB26 is a good start to making Missouri more competitive in terms of income taxes.

“Oklahoma just lowered their income tax lower than they intended to,” he added. “Those states ahead of Missouri want to stay ahead. There’s a real sense of competition.”

Kraus said he is staying optimistic as the bill goes through the House — it was second read on the floor last Wednesday — and even as it reaches the Governor, though he said he knows that could be a roadblock. He said if the governor vetoed it, they have the votes in the Senate to override it, but it is dependent upon what happens in the House.

“I have been in almost every Senator’s office or talking to them on the floor,” he added. “If there’s a senator I didn’t talk to about individually about this bill, I’d be surprised. I think this bill is just the right thing to.”

To contact Ashley Jost, email ashley@themissouritimes.com or via Twitter at @ajost.