Governor: Tax-cut bills could hurt region

Although the Missouri General Assembly is no longer in session, the debate between the Republican-led Legislature and the Democratic governor over tax-cutting measures continues with no less energy.

Earlier this week, Gov. Jay Nixon released figures that estimate the two dozen tax breaks approved in the final days of the legislative session could cost state and local governments millions of dollars.

He estimates the annual loss to cities, counties and other taxing districts will be $351 million annually. Based on information released from the governor's office, Cape Girardeau's sales tax revenue would be reduced by $3.4 million annually. For Cape Girardeau County, annual sales tax revenue would be reduced by $1.7 million.

The bills would even touch the city's Town Plaza Community Improvement District, which would lose more than $17,000 annually. If voters approve the Downtown Community Improvement District later this year, it also could see a hit in sales tax revenue.

In Cape Girardeau and other cities across the state, the governor said the revenue loss would affect budgets for firefighters, police, libraries and public transit.

The state would lose $425 million a year, according to the governor's estimates. This doesn't include gradual reductions that will take effect in 2017 -- if state revenue continues to grow -- when the general income tax reduction bill takes effect. That measure is expected to reduce state revenue by $620 annually when it's fully phased in.

Nixon previously has expressed his intent to veto some of the tax-cutting bills, which he said cater to special interest groups. The range of groups that stand to benefit from the tax cuts reach from fast food restaurants and power companies to dry cleaners and country clubs.

But proponents of the bills argue they provide clarification for certain tax laws and policies that could help prevent overreaching by government agencies. For example, a bill sponsored by Sen. Will Kraus, R-Lee's Summit, would require the Department of Revenue to provide notification to businesses when a change is made in the interpretation of sales tax laws. Groups that support the legislation, including the Missouri Chamber of Commerce, have said it would ensure businesses are made aware of changes and given an opportunity to comply with them.

Supporters also have criticized Nixon's projections as extravagant, and Missouri House Speaker Tim Jones, R-Eureka, said in a statement Wednesday that Nixon's projections did not consider the economic benefit the tax cuts might have.

"The governor fails to understand the positive impact substantive tax relief will have on our economy when businesses can reinvest earnings into infrastructure development and more jobs with higher pay instead of using tax dollars to expand government and increase spending," said Jones.

Nixon stood by his projections and his concerns in a conference call with reporters today when he pointed out the Legislature did not follow its normal process when members passed many of the bills. They also passed them after approving the budget, he added, so it does not reflect the possible affect of any of the approved tax cuts.

"Many of these [bills] didn't have fiscal notes, didn't have public hearings ..." he said.

He also said the bills will be taken into consideration as he reviews the state budget if a veto override is mounted for any of the bills when the Legislature reconvenes later this year. The budget must be completed by July 1, and Nixon said he will "seriously consider using ... line item veto power in the budget."

srinehart@semissourian.com

388-3641

Estimated reductions

in sales-tax revenue

By county

* Bollinger County: $130,172

* Cape Girardeau County: $1,768,922

* Perry County: $587,275

* Scott County: $469,740

By city

* Advance: $43,843

* Cape Girardeau: $3,452,124

* Delta: $5,969

* Dutchtown: $493

* Jackson: $508,124

* Marble Hill: $69,311

* Perryville: $391,932

* Scott City: $101,981

* Sikeston: $934,464

By district

* Cape Girardeau Town Plaza CID: $17,104

Source: Office of Gov. Jay Nixon