Special Bulletin #16: Tax Cut Veto Expected Tomorrow, Urge Legislators to Vote NO on Override
Later this week and possibly tomorrow, Governor Jay Nixon will be forced, per a Constitutional deadline to sign or veto SB 509, this year's tax cut bill. The Constitution gives a governor fifteen days from the passage of a bill that is passed during the legislative session to consider the bill. There are multiple indications that the Governor will be vetoing the bill. This sets up a possible override attempt later this week by the General Assembly.
Dating back to last summer and HB 253, administrators have been discussing this issue for several months with their legislators. Unfortunately, many legislators have ignored or downplayed the fears that supporters of public education share with the impact of the bill. Many of those legislators that voted in favor of SB 509 feel that Missouri would continue to support public education and that there are triggers in place to protect school funding.
However, SAC believes that the passage of SB 509 is dangerous in two very distinct ways:
- SB 509 prioritizes tax cuts and Medicaid spending ahead of education. The Missouri budget appropriates approximately $8 billion of general revenue each year. The current trend for annual state general revenue growth is between 3-4%. This equates to approximately $240-$320 million in growth each year. If SB 509 were to become law, then the first $120 million (the annual phased in amount of the tax cut) would first be dedicated to the tax cut. The next requirement to be funded is Medicaid because Missouri must match a minimum level in order to draw down a substantial amount of federal dollars. This entitlement program grows annually by approximately $100 million of general revenue. This means that under SB 509, the first $220 million of general revenue growth until 2022 would be spent before any additional funds could be considered to go to things like education. With the foundation formula, underfunded by $556 million, Missouri schools, particularly those dependent on state funding can count on stagnant funding levels with the passage of SB 509.
- SB 509 leaves the Missouri budget vulnerable to an economic downturn either at the national or state level. If between now and 2022 (when the $620 million cut is fully phased in) the economy were to experience the same sort of decline in a single year as it did in 2008 and 2009, Missouri would be faced with an additional annual loss of revenue of $124 million (the annual cost of the tax cut) as we attempted to recover. This is because the $150 million annual growth “trigger” would be enacted as the budget began to grow from the one-year decline.
It is expected that Governor Nixon will veto SB 509 tomorrow, please reach out to your legislators and urge them to vote NO on any attempt to override the Governor's veto of SB 509.
Please consider also sending a quick email to those brave legislators, listed below, that voted against HB 253 last year. Thank them for their support last year and urge them to hold strong and to consider doing so again. These legislators are under immense pressure to support this bill when it comes up for consideration and a note from friendly administrators from around the state could go a long way to securing their vote.
1. Sen. David Pearce: email@example.com
2. Rep. Elaine Gannon: firstname.lastname@example.org
3. Rep. Paul Fitzwater: email@example.com
4. Rep. Sue Entlicher: firstname.lastname@example.org
5. Rep. Mike Thomson: email@example.com
6. Rep. Lyle Rowland: firstname.lastname@example.org
7. Rep. Craig Redmon: email@example.com
8. Rep. Don Phillips: firstname.lastname@example.org
9. Rep. Donna Pfautsch: email@example.com
10. Rep. Lynn Morris: firstname.lastname@example.org
11. Rep. Jeff Messenger: email@example.com
12. Rep. Kent Hampton: firstname.lastname@example.org
13. Rep. Lyndall Fraker: email@example.com
Posted on Wed, April 30, 2014