Contact: Scott Holste, (573) 751-0290
Scott.Holste@mo.gov
Channing Ansley, (573) 751-0290
Channing.Ansley@mo.gov
FOR IMMEDIATE RELEASE
June 12, 2014
Gov. Nixon visits Cape Girardeau County to discuss with local officials the impact of special tax breaks passed by the legislature
Area leaders raise concerns about impact to vital services from fiscally irresponsible carve-outs passed by the General Assembly that would drain resources from local budgets
JACKSON, Mo. — Gov. Jay Nixon today visited Cape Girardeau County for a roundtable discussion with local officials about the impact of special breaks and exemptions passed by the General Assembly in the final hours of the legislative session and vetoed by the Governor yesterday. Together, provisions in these bills would reduce state and local revenues by up to $776 million annually, and were not accounted for in the budget passed by the legislature or in the budgets of the local jurisdictions they would impact. Most of these provisions would impact sales tax collections, and therefore would reduce local tax revenues.
“From fire protection to storm water management, these special breaks for special interests hastily passed by the legislature would undermine the basic public services these communities rely on to support the health, safety and quality of life of their citizens,” Gov. Nixon said. “These provisions would begin reducing revenues immediately, and with no guarantee that my vetoes will be sustained, these special interest giveaways will have to be accounted for with tough choices and dramatic spending reductions on the state and local levels.”
Yesterday, the Governor vetoed Senate Bills 693, 584, 612, 860, 727, 662, and 829, and House Bills 1865, 1296 and 1455, which contain more than a dozen special breaks for a variety of industries. If these bills were to become law, they are projected to reduce state revenue by up to $425 million annually and local revenue by up to $351 million annually starting in the fiscal year that begins on July 1. By reducing local tax revenues, these special breaks would undermine support for services including police, fire, ambulance, emergency services, parks, and other vital public services provided at the local level.
In a letter urging the Governor to veto the bills, the Cape Girardeau County Commission pointed out that under the county sales tax system in place since 1979, “any decrease in county sales tax in Cape Girardeau County creates an increase in the county property tax.” According to the Commission, if allowed to become law these provisions would result in a “county property tax levy increase of at least three fold.”
“Locally, personal property tax would increase if these tax breaks become law,” said Paul Koeper, Cape Girardeau County Associate Commissioner and president of the County Commissioners Association of Missouri. “We appreciate the opportunity to meet with Governor Nixon and reaffirm our concerns and thank him for supporting local control. “
The bills vetoed by the Governor include new sales tax exemptions for recreation venues, fast food restaurants, power companies, data storage and processing, used vehicles, supplies and equipment used in electricity generation, and commercial laundries.
“All across Missouri, communities have come together to pass local sales taxes to support local public services and capital improvements,” Gov. Nixon said. “These special breaks passed by the General Assembly would siphon these voter-approved resources away from their intended purpose, and into the pockets of the well-connected.”
The reduced state sales tax revenue would also reduce funding from dedicated sales taxes for K-12 schools (also called the Proposition C sales tax), Highways, Conservation, State Parks, and Soil and Water Conservation Programs.
The loss of local revenue from these provisions could also impact repayment of voter-approved bonds issued to finance capital improvements such as county jails, county hospitals, fire stations, emergency management centers, road projects and other critical public infrastructure.
An overall summary of the fiscal impact of these provisions is available here.
A breakdown of the fiscal impact on local taxing districts is available here.
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Follow the Governor on Twitter @GovJayNixon
Scott Holste
Press Secretary for Missouri Governor Jay Nixon
573-751-0290
scott.holste@mo.gov
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