Missouri Gov. Jay Nixon followed through with his earlier threat by vetoing on Wednesday 10 bills passed during the last day of the legislative session. The bills set up special tax breaks for a variety of businesses, from restaurants to data centers.
Nixon’s budget office calculated that the measures would cost state and local governments as much as $776 million a year in lost revenue. The governor also noted that the $425 million in state tax cuts had not been accounted for in the state budget – also approved by the General Assembly – for the fiscal year that begins July 1.
At his news conference, the governor jabbed at the Republican-led General Assembly by noting the tax-cut package that legislators have put in place over his veto and the proposed transportation sales tax slated for the Aug. 5 ballot. He opposes the sales tax proposal.
“Perhaps most troubling is the way the General Assembly is carving out special sales tax breaks for a select few, while pushing a $6.1 billion sales tax hike on all Missourians,” Nixon said. “Passing secret, sweetheart deals so that the well connected can pay less, while asking all Missourians to pay more, reflects priorities that are dangerously out of whack.”
House Speaker Tim Jones, R-Eureka, was critical of Nixon's move and promised to try to resurrect these bills during the veto session in September:
“I am disappointed but not surprised that the governor has once again stood in the way of providing tax relief to Missouri families and businesses," said Jones in a statement. "By vetoing these bills he has reemphasized the fact that the focus of his tax and spend administration is on growing the size of government rather than growing our economy."
Dan Mehan, president of the Missouri Chamber of Commerce, was among those blasting the governor’s actions and calling on legislators to overrule him during the September veto session.
“What we are seeing is a roadblock mentality. Throughout this past session, the governor refused to engage in the legislative process. Now, when he has the opportunity to sign bills that will help our economy, he has chosen instead to use his veto as an impediment to growth,” Mehan said. “We hope our friends in the legislature will see through the distortions in the governor’s veto letter, which are built on flawed calculations and philosophically hollow assumptions. Fortunately, another route is available. Let’s use the legislature’s override power to finish our job and put Missouri’s economy on the road to growth.”
In his veto letter, Nixon asserted, “Rushed through with little debate in the final hours of the legislative session, these special breaks and exemptions for a handful of special interests are the result of a deeply flawed process and a fundamentally misguided approach to tax policy. Many of the most costly provisions were slipped into bills without a public hearing or even a fiscal note, and none of these giveaways were accounted for in the budget the legislature sent to my desk or in the local budgets of the jurisdictions they would impact.”
His office explained, “The provisions include special breaks for fast food restaurants, personal seat licenses, commercial dry cleaners and laundries, data storage and processing, certain used vehicles, farmers’ markets and fitness centers.”
Said Nixon: “These special carve outs and loopholes would undermine local public services and flout the will of voters by eroding revenues that support services like firefighters and cops, libraries and ambulance services, snow plows and health inspectors, public transit and road repair.
“From storm water management in West Plains to fire protection in Webster Groves, voters in communities across Missouri have come together to pass local sales taxes to support local public services and capital improvements. 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 vetoed bills, as listed by Nixon's office, include:
- Senate Bill 693 would "exempt from state and local sales tax certain used vehicles and rights of first refusal for tickets sold at the Sprint Center in Kansas City, and would expand the Wine and Grape Production Tax Credit."
- Senate Bill 584 would "exempt from state and local sales tax items used in the storage or processing of data in any form, items used in the generation, transmission, distribution, sale or furnishing of electricity by power companies, and certain fees paid to places of recreation."
- House Bill 1865 would "create new exemptions from state sales taxes for the cost of utilities used by restaurants, grocery stores, convenience stores, fast food restaurants and other facilities engaged in food preparation."
- Senate Bill 612 would "exempt commercial laundries and dry cleaners from state and local sales taxes on various purchases, and would waive tax liability for certain businesses."
- Senate Bill 860 would "enable a purchaser to obtain a sales or use tax refund, even when they have current tax delinquencies."
- House Bill 1296 would "authorize certain corporations to utilize an alternative method of determining the amount of their income that is derived in Missouri and would add graphing calculators to the back to school sales tax holiday."
- Senate Bill 727 would "exempt certain items purchased from some, but not all, farmers’ market vendors from state and local sales and use taxes."
- Senate Bill 662 would "waive tax liability for certain businesses and would exempt from sales tax rights of first refusal for tickets sold at the Sprint Center in Kansas City."
- House Bill 1455 would "allow a business to claim a sales tax exemption without requiring it to prove eligibility for the exemption."
- Senate Bill 829 would "enact duplicate legislation to House Bill 1455."