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Missouri Lawmakers Overturn Veto of Tax Cut Bill

The state House has voted to overturn Governor Jay Nixon's veto of an income tax bill, SB 509.
(JEFFERSON CITY, Mo.) The state House has voted to overturn Governor Jay Nixon's veto of an income tax bill, SB 509. After the Senate voted earlier Monday 28-3 to overturn Nixon's veto, House Republicans led a 109-46 vote to complete the overturn.

All 108 Republicans in the House were joined by one Democrat, Representative Keith English (D-Florrisant), who walked into the chamber long enough to cast his vote and then immediately left again. He was not present for votes on Monday or prior to the override vote on Tuesday.

The proposal would reduce the top personal income tax rate of from 6-percent to 5.5-percent over 10 years starting in 2017 if state general revenue growth continues. The bill would also phase in a 25-percent deduction for business income reported on personal tax returns. State revenues would have to keep rising by at least $150-million over their highest point in the previous three years.

The legislature's fiscal note on the cut says it would reduce state revenue by $620-million annually. Republicans say because the cuts are triggered by increases in revenue, that loss would be offset before any state services and programs have to be cut.

Nixon has argued that the wording of the bill could also result in the elimination of taxes on all income beyond $9,000 annually, resulting in a cut of $4.8-billion dollars annually to state revenue. Republicans legislative leaders have dismissed those concerns as "laughable" and an attempt at distraction.

Reaction:

Gov. Jay Nixon today issued the following statement regarding the legislature's override of his veto of Senate Bill 509:

"Missouri families and businesses know that public education is the best economic development tool there is, and that is why I vetoed Senate Bill 509," Gov. Nixon said. "While scaled back from last year's billion-dollar House Bill 253, Senate Bill 509 fails to prioritize or adequately protect public education at a time when quality public schools are more important than ever to our ability to create jobs in the global economy.  And while its authors may have delayed its impact, Senate Bill 509 remains a very real threat to the principles of fiscal discipline that have helped us maintain our spotless AAA rating for decades.  As I have from Day One, I will continue to manage the budget with the resources available and keep our state moving forward."

Missouri House Speaker Tim Jones issued the following statement regarding the legislature's successful override of Governor Nixon's veto on a bill to lower Missouri's tax rate on its workers and small business owners.

"Today, we showed Missourians why they elected a Republican supermajority to the Missouri legislature: we pass important, conservative policies.  Updating our tax laws is an essential, pro-growth reform which will improve our economy by allowing small businesses, farmers, and families across our state to keep more of their own money.  Our high tax rate has been harming our economy, making our state less competitive and resulting in thousands of Missourians leaving our state for low-tax states like Florida and Kansas," said Speaker Jones.

"Missouri's economy has become stagnant under Governor Nixon's watch.  The median income has dropped by more than $1,500, and all too often the news reports that yet another Missouri company has moved just across the border to take advantage of more business-friendly policies.  Passing this common sense tax reform into law is the first step toward transforming Missouri into a pro-growth state."
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