SB 380 ISN'T TOP TAX JUMP; IT'S 4TH, OR 2ND

Peter Kinder regularly refers to Senate Bill 380 as the largest tax increase in the history of Missouri. Kinder opposed Senate Bill 380 for what he regards as sufficient reason. I do not write here to debate the bill's merits or the politics which surround the bill. My only subject is Kinder's contention that Senate Bill 380 is our state's largest tax increase.

In fact, Senate Bill 380 is not the largest tax increase ever. By any rational measure, comparing apples to apples, it is fourth. Even by the most deceptive analysis possible one can only get Senate Bill 380 up to second -- without lying, that is. Senate Bill 380, adopted in 1993 by the Legislature, produced $62.0 million in 1994 and $324.3 million in 1995. Senate Bill 380 will represent a 12.6 percent increase in state income taxes at its first full funding level. Compare the dollars and percentage increase due to Senate Bill 380 to the following three tax increases.

First, in 1971 the Legislature raised income taxes $110 million, a 66 percent increase. That is the largest percentage tax increase and resulted in taxes higher by $403 million in 1995.

Second, during 1992, the last year of his administration, Gov. Ashcroft signed into law three tax increases that when combined total more than a half a billion dollars in taxes which were not voter approved (HB 1744, HB 25, HB 1247). I am not critical of Ashcroft for doing so, but in light of these increases Republican criticism of Gov. Carnahan does seem a bit deceptive and self-serving. While separated into three different bills there is no doubt that when combined, these bills represent the largest increase in taxes ever enacted in Missouri in one year ($544 million fiscal year 1995).

In 1992 I was in the Legislature and chairman of the House Budget Committee. At the request of then-Gov. Ashcroft, I sponsored and passed House Bill 1744, called the Federal Reimbursement Allowance, a tax at $182.4 million in 1993, $303.8 million in 1994, and $330 million in 1995. It was passed without a vote of the people but with the unanimous support of the Republicans and Democrats in both the House and Senate, including Sen. Kinder. In 1992, also at the request of Ashcroft, the Legislature passed, again without a vote of the people, but with the support of both parties in the House and Senate, the 6-cent increase in the gasoline tax. It was phased in and produced $70.5 million in 1993 at two cents, $150.6 million in 1995 at four cents and will produce $226.0 million in 1997, the first full year of funding. At full funding it represents a 55 percent increase in gasoline taxes. Finally, in 1992, the Legislature enacted and Ashcroft signed a 1 1/2 percent local-use sales tax that produced $63 million fiscal 1995.

Third, in 1982 the people adopted the 1-cent sales tax for education, a 32 percent increase in state sales taxes at its first full year of funding. In fiscal 1984 the tax raised $316.1 million and in fiscal 1995, $545.9 million. While about half of this funding is directed toward reducing property taxes, many Missourians do not own real property and thus bear the full burden of the tax.

I am not arguing the merits of any of these proposals or the way they are used or collected. One could say that the Federal Reimbursement Allowance was simply a clever mechanism designed by the Ashcroft administration and me to increase Missouri's share of federal dollars, and it certainly was that. But it was also by any definition a tax increase. The Legislature and the governor tried to mitigate the impact of the 6-cent tax gas by phasing it in -- indeed the full impact on state motorists is yet to be felt. At full funding it will still represent an increase of 55 percent and $226 million. One could argue that the 1-cent sales tax was voted by the people. That's true, and it was also a sales tax increase of $316 million and 32 percent at its first full year of funding.

The merits of all these proposals, including Senate Bill 380, are arguable. What is not arguable is that they are all tax increases, and if they are measured by the same scale it is clear that Senate Bill 380 is not the largest tax increase in the history of Missouri. Any comparison of Senate Bill 380 to any of the other tax increases in constant 1995 dollars makes Senate Bill 380 the fourth largest. It doesn't matter if you compare by percentage or by real dollars at time of passage or even by the most deceptive measure, 1995 dollars compared to previous year dollars, you still can't get to the conclusion that Senate Bill 380 is the largest.

Knowing and personally liking Kinder, I am willing to believe that he was simply unaware of these facts. I do not like to think that he would lie. Of course, any repeat of the allegation that Senate Bill 380 is the largest tax increase in the history would simply be a premeditated lie. My respect for Kinder's character is such that I would be disappointed if he were to do that.

Christopher S. Kelly of Columbia is a former state representative who served as House budget Committee chairman and currently serves on the Missouri Labor Commission.