Tax Experiment Proving Troublesome for Kansas EconomyRecent data released by the US Bureau of Labor Statistics shows what we have been saying all along: extreme tax changes do not help the economy, they hurt it.
Reckless Tax Legislation Slashes Funding for SchoolsSeveral bills filed this year propose the same recycled tax policies from last year, except some are even worse, blowing more than a $1 billion hole in the state’s budget. The results are the same too; the policies will take dollars out of classrooms, lead to tuition increases for college students, and stall Missouri’s economy.
The Coalition for Missouri’s Future is disappointed that the Missouri House has chosen to do the bidding of special interests rather than focus on what Missouri needs to really build a competitive 21st century economy: investments in quality preschool through higher education, infrastructure and other critical services.
Tax cuts are not a strategy for economic growth, and these tax cuts are designed to help wealthy Missourians and large corporations, not average Missouri families. “While the wealthiest Missourians might benefit from SB 509 – particularly if they have an LLC or partnership – the bill provides little for the average Missouri taxpayer struggling to get by,” said James Moody, lobbyist for the Kansas City Civic Council.
Last summer, Missourians asked legislators to protect education and critical services throughout Missouri. But Senate Bill 509 would cost nearly $800 million, threatening state funding for education, health care, public safety, and social services.
“Missouri schools are already severely underfunded,” said Carter Ward, Executive Director of the Missouri School Boards Association. “Tax cuts would likely result in increased class sizes and reduced course offerings.”
Tax cuts are no way to build an economy. As seen across the border in Kansas, tax cuts result in reduced funding for schools. “It’s nonsensical to risk education when Missouri is preparing students to compete not just locally, but nationally and internationally,” said Roger Kurtz, Executive Director of the Missouri Association of School Administrators. “Missouri schools simply cannot absorb any additional cuts without more programs being cut or property taxes being increased.”
But it’s not just education at risk. In context, the bill’s nearly $800 million cost exceeds both the underfunding of the schools foundation formula and the annual funding for the Department of Mental Health. “Cuts to mental health services over the last decade have increased waiting lists for care, and resulted in shortages for acute psychiatric hospital beds,” said Misty Snodgrass, Director of Public Policy for the Missouri Coalition of Community Mental Health Centers. “This has real-world consequences for families and the community.”
The Coalition for Missouri’s Future urges Governor Nixon to veto SB 509 and any other tax cuts that reduce general revenue.
While campaign donors may appreciate their nearly $8,000 annual tax cut, average Missourians would rather the state invest their $4.75 a month in schools, infrastructure and other services that strengthen Missouri’s economic competiveness.
This legislative session, the Missouri General Assembly is considering several tax bills that could blow a $1 billion or more hole in the state’s budget. These tax schemes threaten Missourians’ quality of life and access to critical public services. If they were to become law, the consequences will be far-reaching: overcrowded classrooms, increased costs for college students, diminished public health and safety, and deteriorated public infrastructure.
This comes at a time when crucial state services are already underfunded. The K-12 education formula is currently $650 million underfunded and higher education funding is more than $100 million below 2001 funding levels. The revenue reductions from these tax bills will only dig these holes even deeper.
The proposed tax schemes prey on senior citizens who rely on state funding for nursing homes, in-home care, and meals on wheels. They will also force higher property taxes on the elderly, making it more difficult for them to stay in their homes
Businesses looking to invest in Missouri expect a sound transportation network, a qualified workforce, and a climate where entrepreneurs can thrive. Yet, these tax schemes will rob the state of these assets, causing disinvestment in education and workforce training, public infrastructure, and the overall quality of life of Missourians. This will be a detraction for businesses, and they will look elsewhere to grow and invest.
And after Missouri’s credit rating plummets, its borrowing costs rise, and its quality of life sours, Missourians will be stuck with the new tax scheme and its devastating consequences. The Hancock Amendment handcuffs the legislature’s ability to reverse course because it requires a public vote on most tax measures.
Proponents of these measures are looking to give a tax cut to the wealthy at the expense of the rest of Missouri citizens. Don’t let them destroy Missouri. Contact your legislators and urge them to vote NO on these disastrous tax schemes!
The Missouri General Assembly is considering tax scheme legislation this year that will take dollars out of classrooms and cut funding to other critical state services.
With a budget hit that could exceed $1 billion annually when fully phased-in, every public service is bound to be impacted, including state aid to public colleges and universities. Higher education is typically the first area of the budget hit when the state faces budget shortfalls. That means more pressure to hike tuition to make up the difference, which translates into a hidden tax increase on middle-class families with college students. Just look at Kansas. After making drastic changes to their tax structure, colleges and universities in the Sunflower State are making
up the difference by increasing students’ tuition at several times the rate of inflation.
The tax schemes will devastate financial aid and scholarships for higher education as well. These include the A+Scholarship Program, a program that pays students’ tuition for community colleges if they get good grades and engage in community service; Access Missouri, a needs-based aid program providing financial assistance to low-income families; and Bright Flight, a scholarship program that offers an incentive for Missouri’s most talented students to attend college in the Show-Me State. The tax schemes that the General Assembly is considering threaten all of these programs and many more, putting college out of reach for many students and making it more difficult for them to reach their full potential.
The cuts to higher education funding also will cause colleges and universities to reverse course on plans for new programs and initiatives designed to spur economic growth in their local communities and across the state. Higher education institutions often serve as the nucleus for local communities and, to a broader extent, serve as economic development incubators for the state. If these tax schemes take effect, Missouri’s economic engine will stall, leaving the Show-Me State on the sidelines, while states that invest in higher education thrive.
The Coalition for Missouri’s Future is extremely disappointed that the Missouri House has approved more state tax schemes that will jeopardize funding for our public schools and other essential services for years to come.
Last summer, Missourians asked legislators to protect education and critical services throughout Missouri. However, House Bills 1253 and 1295 would threaten state funding for education, health care, public safety, and social services.
It is especially ironic that the House would act to reduce state revenue while at the same time claiming there is insufficient revenue to fully fund the school foundation formula within the next two years.
While the Coalition for Missouri’s Future supports policies that simplify and modernize Missouri’s tax structure, bolster the economy through tax cuts for the middle class, and preserve funding for the public investments that serve as the foundation of our state’s economy, HBs 1253 and 1295 fail to meet any of these criteria. read more…
The Coalition for Missouri’s Future applauds bipartisan discussion of Missouri’s funding needs. We are also happy that the Governor has strongly stated that Missouri must fully fund the state’s K-12 funding formula before tax cuts will be considered.
The Coalition will measure any tax proposal against our goals around tax policy. Any tax policy should modernize our tax structure, bolster Missouri’s economy, and provide adequate revenue to protect vital public services and works that strengthen our economy.
The Coalition is currently reviewing the framework of the proposal and will be evaluating details as they emerge.