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Democrat pushback on tax cut could set stage for slow-moving special session

  

Jefferson City, Mo. — Missouri House Democrats have pushed back against Gov. Mike Parson’s proposed income tax cut and agricultural tax credit program. Spearheaded by Minority Floor Leader Rep. Crystal Quade, D-Springfield, Democrats have called the plan “fiscally irresponsible.”

The Governor’s special session is an election season ploy to change the subject after suddenly discovering that eliminating Missourians’ reproductive rights isn’t the winning issue Republicans thought it would be,” Quade said in a press release put out just minutes after Parson’s Monday afternoon press conference. “It is also a textbook example of fiscal irresponsibility.”

Parson proposed a variety of cuts at a press conference Monday that are permanent and different from the rebate detailed in HB 2090, an income-tax-based bill that would have given a refund based on income-tax liability. Parson vetoed the bill on July 1. He has now proposed a 4.8% income tax rate, down from the current 5.3%. 

“Our tax cut proposal means that every taxpaying Missourian, no matter their background, income, or job description, will see a reduction in their tax liability,” Parson said. “Every Missourian will earn their first $16,000 tax-free and married joint filers will earn their first $32,000 tax-free, resulting in significant savings for millions of Missourians.”

Legislators and interested groups have criticized the way the cut is calculated. Currently, the Governor is proposing a cut based on income tax. This means the more a resident makes, the more a resident will save, keeping more money in the pockets of high-earning Missourians than low-earning ones. 

According to data from the Institue of Taxation and Economic Policy, the top 1% of Missourians would see by far the most benefit from the tax cuts, even when factoring in the new standard deduction for married and joint filers. The lowest earning Missourians, those making less than $22,000 annually, would see by far the least benefit.

The proposal also doesn’t give a clear way to help pay for state revenue lost to the tax cut.

Parson met with Democratic House members Tuesday. 

“We had a nice conversation, to be honest,” said Rep. Peter Merideth, D-St. Louis City, a ranking minority member on the Budget committee. 

Meredith said that there was some pushback, but that there were also some things that House Minority Leadership and the Governor agreed on as well. 

The tax proposal has seen its fair share of backlash, however the other piece of legislation Parson wants to work on combined with tax cuts could make for a long, possibly contentious session. The opposite of what Parson wants after calling a session over two bills he vetoed.

“The Senate rule has the chance to come together, on both sides of the aisle, for what’s good for all Missourians,” Parson said at his press conference Monday after making remarks about his hope for a quick session.

The other bill on the table is HB 1720, a bill with stipulations regarding The Missouri Agricultural and Small Business Development Authority (MASBDA) and the longevity of the programs it holds authority over. Parson wanted more of the programs to be up for renewal after six years,  instead of the proposed two years, with a possible six-year extension. 

“Vetoing an ag bill is not something I took lightly or wanted to do,” Parson said Monday. “But we cannot leave our farmers, ranchers and business owners with a bad deal.”

The bill passed the House 111-26, with support from Democrats. Without their support, it is difficult to say if the bill would have passed. This need for Democrat support is something that will likely follow this bill into the upcoming session. 

But there are other aspects that could cause issues this session as well. 

Some members of the general assembly that are participating in this session will not be returning afterward. Many have lost their primary, which is a factor that could change their perspective on voting for or against legislation. 

Many members won their primary and some could use this session as a potential boost they could use for their gain in their upcoming general election. 

Either way, a session after primaries but before generals can certainly throw a wrench in the agendas of many legislators from both sides of the aisle In Jefferson City.

With Senate leadership elections looming, and in the wake of the conservative caucus’ “olive branch” many factors will be playing into the politics of the upcoming special session

The only thing we know for certain is that it will not be quick or easy.

Featured Image: Rep. Crystal Quade and the House Democratic Caucus holds a press conference (TIM BOMMEL/HOUSE COMMUNICATIONS).