HOLIDAY-FROM-TAXES PLAN LOSES SUPPORT

JEFFERSON CITY -- Missourians will not get a tax holiday this year, the sponsor of the plan said last week.

State Sen. Ken Jacob, D-Columbia, had a bill that would have suspended state and local sales taxes on clothing items valued at less than $100 for a nine-day period in August. Jacob's proposed tax holiday was timed to coincide with the back-to-school shopping period.

The Senate debated the bill April 13 but shelved it without taking action. Jacob said members of the State Budget Control Committee told him last week that even if the bill won a first-round floor vote, it would not make it past the committee. The committee reviews bills that impact the state budget.

"I was informed that it could not get out of budget control," Jacob said in an interview. "I made an effort to talk to some of the opponents, but they could not be persuaded."

According to the Office of Administration, the tax holiday would have cost the state $6.5 million in lost revenue. Local taxing jurisdictions would have been reimbursed by the state for their losses. Opponents of the proposal said it carried too high a price tag.

"The fiscal cost was substantial," Jacob said. "But in the grand scheme of things, when you look at the amount of money people pay in taxes, it's very minimal."

Jacob said Missourians would have enjoyed the tax break, and it would have benefited families buying their children back-to-school clothes.

"I really think people would've appreciated it and would've liked it and had a positive feeling toward government," Jacob said.

He also noted many people from out of state would likely converge on Missouri to take advantage of the holiday and spend money on other items not covered by the tax break.

Sen. Jim Mathewson, the budget control chairman, said he liked Jacob's plan, but that with a tight revenue picture this year the state couldn't afford it.

"It's not a bad idea; it's a good idea," Mathewson said. "I have no problem with the idea. My concern right now is to hold down expenditures."

In recent years, the state has enacted $700 million in budget cuts. Also, by this fall the state will have refunded an additional $973 million to taxpayers since 1997 under the Hancock Amendment, which limits growth in state revenues.

So far this legislative session, Mathewson said, the Senate has approved about $33 million in new spending.

"We really make a concentrated effort to hold down legislation that requires us to increase expenditures," Mathewson said. "We just can't keep spending until we get a handle on where revenues are and what we can afford."

Mathewson said lawmakers should wait at least a year to see how state revenues look and if the economy remains strong before seriously considering a tax holiday. Jacob plans to reintroduce the bill next year if he is re-elected in November.

The bill is SB 1016.

Marc Powers may be contacted in Jefferson City at (573) 635-4608 or by e-mail at mppowers@socket.net.