In memo, Rep. Stream makes opening argument to colleagues for HB 253 override

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– House Budget Committee Chairman Rick Stream penned a memo to colleagues on Tuesday laying out GOP leadership’s case for an override of income tax legislation vetoed by Gov. Jay Nixon earlier this summer.

In a three-page letter to Republican members obtained by PoliticMo, Stream said he wanted to “set the record straight on House Bill 253,” as lawmakers face increasing pressure from interests riled up by Nixon’s aggressive campaign against an override, including local pharmacies and school districts, both entities that Nixon has said could be harmed by the bill.

Stream laid out the basic facts of the bill for members, highlighting the income tax reductions and specifically noting the $100 million triggers, as well as the bill’s provisions, including the tax amnesty, streamlined sales tax, and the use tax nexus. The bill would reduce income taxes by half a percent for all Missourians over ten years. By 2017, it would allow individuals to deduct 50 percent of business income and reduce corporate income taxes by 3 percent over the next decade.

Stream told members he wanted to reassure them that the state is in a “strong fiscal position” and plans to “continue funding education at the highest levels in state history,” even if the new tax plan were to go into effect.

As he and House Speaker Tim Jones did in a public statement, Stream reiterated to colleagues the notion that the income tax bill is a “historic” opportunity for members.

“Nobody previously serving as a state representative in our districts has passed a bill like this since prohibition, and there have only been eight veto overrides in the last one hundred years,” he said. “For us, this vote is potentially a once in a lifetime opportunity, not a burden.”

Stream said there “is a reason” the GOP holds veto-proof majorities in both chambers and Democratic statewide candidates “run on fiscally conservative principles”: “Missouri voters have made it clear they want us to govern on fiscally conservative principles and cut government waste.”

“I firmly believe that overriding HB253 is a safe vote and an opportunity for our caucus to unite on an issue all of us campaigned on: lower taxes,” he said.

Stream said that Nixon’s projections about massive cuts to revenue in the tax cut’s first year are “inaccurate” and part of an effort to “mislead Missourians.” Stream said using Office of Budget and Planning numbers, the first-year impact of HB 253 would an additional $14.9 million dollars. In Fiscal Year 2015, he said, the state would be set to $101.5 million, but if there is not $100 million in growth, the tax cut would not go into effect that year.

“This means, no growth, no tax cut!,” Stream wrote.

Stream also denounced Nixon’s drastic numbers that show the potential impact of House Bill 253 if the federal Marketplace Fairness Act were to go into effect, noting, “it has gained little to no traction in the House and has actually started to generate some stiff opposition.”

Stream wrote that he feels Nixon “is needlessly withholding $400 million to punish schools, agriculture and State employees in order to score political points.”

Nixon’s administration presented numbers earlier this week showing the potential revenue loss for education they believe could happen if the tax cut legislation goes into effect. Nixon’s administration said it sees anywhere between $250 million (if the law were to go into full effect) to $450 million (if the federal government moves forward on the Marketplace Fairness Act) in lost revenue funding if lawmakers override his veto.

Stream said if the state does nothing to change its tax code, he believes jobs will “bleed to other states.”

“HB 253 is not perfect, and there are probably some things that will need to be fixed when we come back in January, but the fear mongering coming out of the executive branch has gone too far,” Stream wrote. “If the Governor really believes that there are some technical problems with the bill, I would welcome him calling us into special session to fix them. I believe the Governor philosophically disagrees with us on lower taxes and is throwing a tantrum to get his way.”

Stream’s letter, which comes before the caucus has officially sat down to decide whether they will even seek to override Nixon’s veto, comes as members are reconsidering their position ahead of the September session.

The original vote pulled 103 votes — six short of the constitutional supermajority required to override Nixon’s veto. Three Democrats voted for the bill, while three Republicans voted against the bill. All six members have said they are reconsidering their vote. In addition, eight members were absent for the vote, including two Democrats and six Republicans.

State Rep. Nate Walker, R-Kirksville, and Rep. Jeff Roorda, D-Jefferson County, have both said they are reconsidering their original vote in favor of the bill.