JEFFERSON CITY, Mo. – Democratic Gov. Jay Nixon claimed new progress in negotiations with Missouri Republicans over how to move forward with income tax cuts in Missouri, after engaging in a summer-long campaign last year against the General Assembly’s proposal.
During remarks to the Missouri Press Association’s annual gathering in Jefferson City on Thursday, Nixon said he would be open to signing a bill that would cut income taxes by half of a percentage point if it is tied to fully funding public schools and cutting back on tax credit spending.
“I’ve never been opposed to making responsible changes to our tax code,” Nixon said. “But if we’re going to cut taxes, I want it done the right way, in a way that protects investments in our classrooms and gives a break to folks who really need it. Over the past several months we’ve had productive, substantive discussions with members of the legislature, including Senator Will Kraus and others, and this week we made some real progress.”
Nixon said he would not sign a tax cut that prevents the state from fully-funding the K-12 foundation formula. Additionally, he proposed changes to tax credits that do not produce as much economic return for the state. Nixon said he was opposed to cuts for some LLC’s that “reward creative accounting instead of a hard day’s work.”
“If the legislature is serious about giving tax relief to ordinary Missourians who need a break – they need to shelve these giveaways to the lawyers and lobbyists who don’t,” he said.
Nixon noted that he and Sen. Will Kraus, R-Lee’s Summit, were in the early stages of the process and that he was committed to continuing discussion to “make sure that the legislation being proposed is not altered to compromise these principles.”
Kraus, in a statement provided by Nixon’s office, said the pillars outlined by Nixon provide a “solid framework” on which legislators can begin work. “I appreciate the Governor’s willingness to engage with members of the legislature on this issue and look forward to working with my colleagues to get this legislation to his desk,” he said.
Nixon’s office said Kraus’s bill would provide a .25 percent reduction to individual taxes only after the K-12 formula is fully funded and after $200 million in revenue growth. The legislation, the governor’s office said, would provide an additional .25 percent reduction after legislation was enacted to reduce issuance low-income housing tax credits to $110 million annually and historic preservation tax credits to $90 million annually.
House Speaker Tim Jones, R-Eureka, speaking with reporters last week, signaled his opposition to tying the two issues – tax cuts and tax credits – together.