CARTHAGE, Mo. — Another summer will bring another tax fight between Democratic Gov. Jay Nixon and the Republican-led General Assembly.
Last year, Nixon led a successful campaign to sustain his veto of one tax bill that he said would cut between $700 million and $1.2 billion from the state budget. This year, the fight for Nixon is against 10 separate bills that, collectively, he says could eliminate more than $700 million from the state’s coffers.
Nixon laid out his case on Friday in Carthage against what he called a “grab bag of giveaways for special interests.”
“We have been through what it’s like to have a downtick in sales tax,” Nixon told local officials. “We don’t come off a base where there’s a bunch of extra dollars there.”
Nixon’s administration has estimated the cuts could cost Carthage more than $600,000 annually.
“It’s hard for municipalities to come up with numbers at this point,” Mayor Mike Harris said. “It’s a fiscal impact we cannot absorb without cutting some services.”
One $152 million measure would exempt electricity and equipment used by computer data centers from sales tax.
Advancing the data center industry has been a portion of the Nixon administration’s Strategic Initiative on Economic Development — the plan had called for expanding tax credits for the companies. But Nixon said the cut passed by the Legislature was “dramatically” different and not accounted for in the budget.
Another measure would exempt restaurants and grocery stores from paying sales taxes on electricity used to prepare food. One would remove sales taxes on energy, soap and chemicals that are used by dry cleaners, which Nixon says could cost $2 million each for state and local governments.
Not all of the tax breaks would be applied to traditional “special interests.” One of the measures would exempt those purchasing 10-year-old used cars for sale for as much as $15,000 from sales tax, which the Department of Revenue estimates would cut state revenues by $33.5 million and local government revenues by $26 million annually.
Another could save exercisers at fitness clubs $35.8 million annually on entertainment taxes levied by the state. And a third would exempt farm products sold at farmers’ markets from state sales tax.
Nixon also vetoed a measure backed by Rep. Mike Kelley, R-Lamar, that would add graphing calculators to the state’s annual tax holiday for school supplies.
Whether or not those were good ideas, Nixon said, the process was not “transparent.” Many of the measures were passed in the final day of legislative session. Most of the measures were passed after state lawmakers overrode Nixon’s veto of a $700 million income tax cut for state businesses and individuals.
Nixon, during an interview at the Joplin Globe later in the day, said he had invited all of the local lawmakers to the event in Carthage. None of them, however, showed up. State Rep. Tom Flanigan, R-Carthage, is a member of the House Budget Committee. He said he was in Jefferson City Friday morning meeting with Nixon’s Office of Administration to discuss the budget withholds Nixon is planning to announce, in part because of his fear that lawmakers will override his veto of the tax breaks.
“He flies around, he’s going to tell you the sun won’t come up tomorrow and all of that, but the fact of the matter is if he’d spend as much time trying to promote business instead of dissing the Legislature, or working with the Legislature to try to get some activity that benefits the people who live here, we’d be better off,” Flanigan said.
Flanigan did lend some sympathy to Nixon’s idea that the tax breaks were passed after lawmakers finalized their Fiscal Year 2015 budget. As a budgeter, he said, “I can’t know what bills are going to be passed or not.”
“Maybe that’s a weakness of the system. You have members that put out amendments and everything,” Flanigan said. But, he added, “the governor is always going to go to the extreme to make a point. He’s going to interpret a piece of legislation to its maximum impact, when it may never happen that way.”
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