JEFFERSON CITY, Mo. – Less than an hour after the Missouri General Assembly adjourned on its last day of session, Democratic Gov. Jay Nixon appeared before reporters armed with a new line of attack on the Republican-controlled state legislature: Their support of tax credits.
“When you reduce the money coming in, you have to reduce the spending that goes out,” Nixon told reporters of new tax credits backed by the legislature. “They didn’t account for even a dollar of the fiscal impact of these.”
After lawmakers overrode Nixon’s veto of a tax credit, Nixon turned to a potential $483 million hit to the state’s budget from new tax incentive measures passed by the legislature to claim they “blew up their own budget” and could in turn hurt education funding.
“Senate Bill 509 was the wrong policy, but that doesn’t even take effect for a while. This is right now. In one week they pass a budget, then come back and blow it up by having a cavalcade of special interest tax breaks fly through the legislative session that makes (balancing the budget) impossible.”
Nixon pointed to eight bills – House Bills 1296 and 1865, as well as Senate Bills 584, 612, 662, 693, 727 and 860 – that his budget office believes could hit the state’s coffers by anywhere between $263-483 million if enacted. All eight of them, Nixon noted, passed on the final day of the legislature.
Many of the legislature’s budget increases for things like education are contingent on state revenues being higher than the legislative budget analysts predicted. They have a two tiered budget — one that gives funding directly to programs, and another that offers funding bumps based on surplus revenue.
“With today’s actions, they spent that surplus revenue fund and then some,” Nixon said. “Special interests won, kids lost.”
Nixon hinted that he might withhold money from the budget to address the potential tax credit deductions.
“The budget they presented to me is seriously out of balance,” he said. “I will be taking the appropriate action to make sure Missouri doesn’t fall off of its fiscally responsible course.”
State Budget Director Linda Luebbering said on Friday Missouri is experiencing reduced revenues this year just like most other states because of reduced capital gains income.
“This current fiscal year is looking less robust than we have hoped for,” she said. “There’s still a possibility at getting to a higher growth rate next year.”