Coalition for Missouri’s Future Objects to Blatant Attempt to Influence Listening Tour

The Coalition for Missouri’s Future strongly objects to Rex Sinquefield’s and Grow Missouri’s blatant attempt to unduly influence the direction of Speaker-Elect John Diehl’s listening tour through its $2.5 million donation.

While the Coalition strongly supports listening tours by elected officials, Grow Missouri’s efforts appear to bias the tour and lend themselves to the perception that one wealthy individual has undue influence on our political process.

The Coalition for Missouri’s Future looks forward to a constructive dialogue to develop comprehensive economic development and tax policy legislation that invests in education, infrastructure and other critical services for all Missourians, grows Missouri’s economy, and keeps our state competitive. However, we are disappointed that Sinquefield and his cronies would try to undermine such an important tool for democratic participation.

 

 

 

Coalition for Missouri’s Future Applauds Rejection of Budget-Busting Tax Breaks

The Coalition for Missouri’s Future thanks legislators for responding to their constituents and members of the Coalition who made their voices heard regarding the need to reject the budget-busting tax breaks passed on the last day of the legislative session.

While the Coalition is relieved that Missouri’s ability to fund education, infrastructure, and other services was not made worse by additional veto overrides, the Show-Me state still faces a dire budget outlook. As a result of the massive income tax cuts enacted in the last legislative session, it will be increasingly difficult for Missouri to fund even the basic services that Missourians need to prosper and for our state to compete.

Missouri needs an effective public education system – from quality early learning all the way through world class, affordable colleges and universities – efficient and effective transportation infrastructure, adequately funded social services, and reliable public safety to succeed in the 21st century knowledge-based economy.

Given the looming fiscal cliff facing Missouri, we urge elected officials to talk with their constituents about Missouri’s future and develop comprehensive economic development and tax policy legislation that invests in education, infrastructure and other critical services for all Missourians, grows Missouri’s economy, and keeps our state competitive.

The Coalition for Missouri’s Future will continue to grow and work with communities statewide to move this vital conversation forward.

Missouri Legislators Should Reject Attempts to Override Budget-Busting Tax Breaks

If passed into law, the budget-busting tax breaks passed in May during the final hours of the 2014 legislative session and vetoed by Governor Nixon will continue to undermine Missouri’s economy and quality of life. As legislators gather for their party caucuses this week and next and consider whether to attempt overrides of these vetoes, the Coalition for Missouri’s Future urges them to be responsible fiscal stewards and let the vetoes stand.

Missouri is still recovering from the Great Recession with funding for critical public services below pre-recession levels, and these budget-busting tax breaks would trap us in a hole from which we can never escape.

Missouri needs an effective public education system – from quality early learning all the way through world class, affordable colleges and universities – efficient and effective transportation infrastructure, adequately funded social services, and reliable public safety to succeed in the 21st century knowledge-based economy.

Rather than haphazard, piecemeal tax cuts, we encourage the General Assembly to work in a bipartisan manner over the coming months to develop comprehensive economic development and tax policy legislation that invests in education, infrastructure and other critical services for all Missourians, grows Missouri’s economy, and keeps our state competitive.

Kansas was supposed to be the GOP’s tax-cut paradise. Now it can barely pay its bills.

Vox | “WE’VE GOT RED INK UNTIL THE COWS COME HOME”  | By Andrew Prokop

In 2012, Kansas governor Sam Brownback signed a massive tax cut into law, arguing that it would boost the state’s economy. Eventually, he hoped to eliminate individual income taxes entirely. “Our place, Kansas, will show the path, the difficult path, for America to go in these troubled times,” he said.

National conservative activists raved. Patrick Gleason of Americans for Tax Reform said Kansas was “the story of the next decade.” The Cato Institute praised Brownback’s “impressive” tax cuts and gave him an “A” on fiscal policy. And the Weekly Standard’s Bill Kristol said that, if reelected, Brownback would be “a formidable presidential possibility.”

Yet though Brownback is running for reelection this fall in a deep red state, he’s trailed his Democratic challenger in 3 of the 4 most recent polls — and his marquee tax cut appears to be the main reason. Kansas is now hundreds of millions of dollars short in revenue collection, its job growth has laggedthe rest of the nation, and Moody’s has cut the state’s bond rating. “Governor Brownback came in here with an agenda to reduce the size of government, reduce taxes, and create a great economic boom,” says University of Kansas professor Burdett Loomis. “Now there’s been a dramatic decline in revenues, no great increase in economic activity, and we’ve got red ink until the cows come home.”

Brownback’s big tax cut

In his Senate career and his 2008 presidential run, Brownback was best known for his social conservatism. “Not limited government, but compassionate government is Brownback’s chief preoccupation,” the Weekly Standard wrote in 2006. But by the time Brownback was sworn in as governor in early 2011, the national GOP was preoccupied with tax and fiscal issues. And in January 2012, Brownback announced that a major tax cut would be the centerpiece of his agenda.

Brownback’s tax cut proposal came as Kansas’s revenues were on an upswing. Spending cuts and a one-cent sales tax passed by Brownback’s Democratic predecessor had combined with economic growth to give Kansas a surplus. Now, Brownback argued, his tax cuts would lead to even more success. “I firmly believe these reforms will set the stage for strong economic growth in Kansas,” he said.

The governor proposed to cut income taxes on the state’s highest earners from 6.45 percent to 4.9 percent, to simplify tax brackets, and to eliminate state income taxes on most small business income entirely. In a nod to fiscal responsibility, though, he proposed to end several tax deductions and exemptions, including the well-liked home mortgage interest deduction. This would help pay for the cuts.

Yet as the bill went through the state Senate, these deductions proved too popular, and legislators voted to keep them all. The bill’s estimated price tag rose from about $105 million to $800 million, but Brownback kept supporting it anyway. “I’m gonna sign this bill, I’m excited about the prospects for it, and I’m very thankful for how God has blessed our state,” he said.

Democrats, and some Republicans, weren’t buying it. “It bankrupts the state within two years,” said Rochelle Chronister, a former state GOP chair who helped organize moderate Republicans against Brownback’s agenda. And the House Democratic leader, Paul Davis, laid down a marker. “There is no feasible way that private-sector growth can accommodate the price tag of this tax cut,” he said. “Our $600 million surplus will become a $2.5 billion deficit within just five years.” In return, Brownback’s administration claimed the bill would create 23,000 jobs by 2020, and would lead 35,000 more people to move to Kansas.

The tax cut’s consequences

After the cuts became law, it was undisputed that Kansas’s revenue collections would fall. But some supply-side analysts, like economist Arthur Laffer, argued that increased economic growth would deliver more revenue that would help cushion this impact.

Yet it’s now clear that the revenue shortfalls are much worse than expected. “State general fund revenue is down over $700 million from last year,” Duane Goossen, a former state budget director, told me. “That’s a bigger drop than the state had in the whole three years of the recession,” he said — and it’s a huge chunk of the state’s $6 billion budget. Goossen added that the Kansas’s surplus, which had been replenished since the recession, “is now being spent at an alarming, amazing rate.” You can see that in this chart (the surplus is cumulative, not yearly):

Kansas has to balance its budget every year, so when that surplus runs out, further spending cuts will be necessary. The declining revenues have necessitatedextensive cuts in state education funding, according to the Center on Budget and Policy Priorities. Moody’s cutof the state’s bond rating this May was another embarrassment. And the economic benefits Brownback promised haven’t materialized either. Chris Ingraham wrote at Wonkblog that Kansas’s job growth has lagged behind the rest of the country, “especially in the years following the first round of Brownback tax cuts.”

Brownback, like New Jersey Governor Chris Christie, has blamed President Obama for his state’s growing red ink. “This is an undeniable result of President Obama’s failed economic policies of increasing taxes and overregulation,” Brownback’s revenue secretary Nick Jordan said. Brownback’s administration argues that because of uncertainty over the “fiscal cliff” in late 2012, some earners paid capital gains tax early, which depleted 2013 receipts.

These numbers don’t add up. The fiscal cliff was a national event, but revenues fell far more in Kansas than in other states, according to a study by the Nelson A. Rockefeller Institute of Government. Furthermore, Goossen says, “Capital gains are not that big a piece of Kansas income. They don’t even come close to explaining a $700 million income tax collection drop between fiscal year 2013 and fiscal year 2014.”

Trailing in the polls

Brownback’s approval rating has plummeted — in a recent poll by PPP, his 33 percent was actually lower than Barack Obama’s 34 percent approval. This is good news for state House Democratic leader Paul Davis, who announced his run for governor last September. “I’m profoundly troubled by the direction our state has been heading over the past three years,” he said in his first campaign email. “The wealthiest and well connected have gotten all the breaks, and the Kansas economy feels broken.” In the most recent poll of the race, Davis leads Brownback by 6 points.

Though no fundraising numbers for 2014 have yet been disclosed, the 41-year old Davis amassed about $1 million in just a few months last year, nearly matching the governor’s total. (On December 31, Brownbackhad only raised $1.1 million — but then his running mate dropped in a $500,000 personal loan to avoid embarrassment.) “Brownback has never been a great fundraiser,” said Loomis. “I think he’s counting on Koch money, Americans for Prosperity money, to come in — and it will come in.” Labor and liberal outside groups are expected to spend for Davis as well.

Yet while Davis opposed Brownback’s tax cuts, and has been harshly critical of their effects, he hasn’t called for them to be repealed. Instead, he’s said that a new round of cuts should be postponed — and called for a commission to explore reducing local property taxes. So it seems that, regardless of who wins this fall, Kansas will be experiencing the effects of Brownback’s experiment for quite some time.

Withholds Result of Irresponsible Budget, Tax Cuts

While we are disappointed that funding for education and other essential state services must be withheld, the Governor’s prudent action today is, unfortunately, necessary given the General Assembly’s irresponsible actions.

Despite clear signs of significant revenue shortfalls and declining revenue in future years, the legislature sent to the Governor an unbalanced FY2015 budget and passed a slew of special interest tax breaks on the last day of session that, combined, will compromise not only the FY 2015 budget, but state budgets for years to come. The result will be a continuing series of cuts to vital public services including education, health and social services, and public safety. Unfortunately, major tax cuts passed this year by the legislature will only make matters worse and continue Missouri on a dangerous path towards serious budget problems similar to what Kansas is currently experiencing.

 

Write your legislators today – tell them to say no to risky tax schemes!