Critics say tax-cut bill will wreck education funding

Opponents of House Bill 253 name education funding as the reason lawmakers should not vote for a veto override in an upcoming session of the Missouri Legislature.

Over the past few months, Gov. Jay Nixon has traveled the state to campaign against an override of his veto. Supporters of the legislation say it would offer the first cut to Missourians' income taxes in 100 years if state revenue rises by $100 million annually.

Through meetings with educators, Nixon has delivered staggering revenue shortfall predictions -- the bill would cost the state $692 million annually, forcing millions in appropriation cuts for K-12 and higher education along with mental health services. The governor outlines an even worse budget scenario if the federal Marketplace Fairness Act passes Congress and becomes law. The federal law would allow, although not require, states to collect taxes on online sales.

In Park Hills, Mo., on Thursday, Nixon met with college and public-school educators to garner support for his veto. A local school board there joined more than 60 others in passing a resolution against the veto override, with the hope of influencing the legislature.

Supporters of the veto override say Nixon is to blame for any cuts education will see because of a $400 million withholding the governor said he put into place partly to protect against fallout from the legislation. He has said several times that "members of the General Assembly can either support House Bill 253 or they can support education -- but they can't do both."

State Rep. Steve Hodges, a Democrat from East Prairie, voted for the legislation during the regular legislative session but plans to stand with the governor against a veto override.

"At first, I looked at this as something that was going to work," Hodges said. "But as time went on and the public has become more educated about it, we are seeing the other side of things that could hurt education. I just can't be a part of that."

Supporters of the veto override are betting Missouri will see the same effect as in nearby states such as Kansas and Oklahoma.

Members of the pro-House Bill 253 lobbying group Grow Missouri say income tax cuts in those states stimulated the economy and led to a rise in revenue from income taxes and sales taxes.

Nixon and others say the move puts Missouri's budget at too great a risk.

"I'm all for helping business, but not at the expense of the general population," Hodges said, pointing to the 0.5 percent tax cut over 10 years written into the bill for individuals, and an attached rise in taxes on prescription drugs.

"The effect would be minute," Hodges said, "and it certainly won't offset any sales tax, especially when they pay more for prescriptions."

Hodges also calls Nixon's withholding of funds a "smart business move."

"He's planning for what might happen," Hodges said.

Nixon, during a recent visit to New Madrid County schools for a meeting with educators, said he would release the funds as soon as the veto of the bill is upheld.

In addition to education funding, the governor said state's AAA credit rating could be jeopardized by House Bill 253.

Hodges is mostly alone in the region in his plan to support the governor's veto, apart from state Rep. Dennis Fowler, R-Advance.

Republican state representatives Kathy Swan, Holly Rehder, Shelley Keeney, Donna Lichtenegger and state Sen. Wayne Wallingford have all indicated they will vote for a veto override.

But Fowler, in his first term as a state representative, voted against the bill in the regular session, and told Stoddard County Republicans last week he would vote against an override, according to the Daily Statesman newspaper.

Fowler said last week he feels the bill could threaten the future of public education by reducing funding. He also objects to parts of the bill that would levy a sales tax on prescription drugs.

"I think the whole thing has been a legislative sound bite," Fowler said. "Certain legislators are trying to get it passed so they can say they tried to lower income taxes when they run for higher office."

Another bother to the governor and several state legislators who plan not to override the veto is the Grow Missouri coalition and several other groups are having their campaigns financed by billionaire Rex Sinquefield. Sinquefield has given the lobbing groups more than $2 million in recent months.

Nixon called the effort by Sinquefield and the groups an "unprecedented attack on public education," during his meeting with educators in New Madrid last month.

According to the figures from the Missouri Department of Elementary and Secondary Education released by Nixon, the 75 school districts that make up the state's Southeast Region would see a total loss of $22 million if the formula for funding schools were reduced by $260 million this year, or $39 million if the formula were reduced by $450 million this year.

eragan@semissourian.com

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