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Session Preview: Missouri debates how much, not whether, to cut taxes

Missouri Gov. Jay Nixon (D) will fight with the legislature over tax cuts (Orlin Wagner/AP)

Missouri Republicans want to cut the state’s income tax. The question isn’t whether they will pass a tax cut — it’s how large that tax cut will be.

Republicans tried the same move in 2013. But Gov. Jay Nixon (D) vetoed the legislation, saying it would cost state government too much money. Despite a veto-proof majority, Republicans couldn’t override Nixon’s veto; 15 Republicans sided with Democrats to uphold the governor’s decision.

Now, Republicans heading back to Jefferson City for Wednesday’s start to the legislative session say they will try again, with a slightly smaller cut. Members of the state House writing the bill are aiming to cut taxes in a way that costs the state no more than $120 million a year.

But the tax cut faces an uncertain future in the Senate. The St. Louis Post-Dispatch previews the legislative fight to come:

[State Rep. T.J.] Berry’s plan still faces considerable hurdles.

Chief among them: Several GOP senators are seeking bigger tax cuts, including a gradual reduction in the 6 percent top personal income tax rate.

“We need to be bold,” said Sen. Eric Schmitt, R-Glendale. “We want to have something broad-based. We want to have something significant.”

Sens. John Lamping, R-Ladue, and Will Kraus, R-Lee’s Summit, also have filed tax cut bills. Lamping would establish a $400-per-child tax credit for middle-class families.

Kraus proposes to cut taxes on personal income, business income and the first $25,000 of corporate income. He said his bill would actually have a higher cost than last year’s measure because it would reduce the personal income tax rate to 5 percent instead of 5.5 percent, as the previous plan did.

Nixon, meanwhile, will push again to expand the state’s Medicaid program under the Affordable Care Act. He has support from the state Chamber of Commerce and Industry, which says Missouri is turning down billions in federal funding by refusing to expand the program to cover those who make up to 138 percent of the federal poverty line.

Nixon will try to ally with fiscal hawks who want to cut some of the half-billion dollars Missouri gives out in tax credits, the St. Louis Post-Dispatch reports, especially for low-income housing developers. And the legislature will debate a 1 percent sales tax increase that would pay for capital improvements, including a 200-mile stretch of Interstate 70 that needs rebuilding.

But most of the rest of the five-month legislative session will be an exercise in partisan tug-of-war. Republicans will push right-to-work legislation that could end up on the 2014 ballot; Nixon has promised to veto the legislation. And Republicans are pushing a cap on medical malpractice awards, a measure similar to one struck down by the state Supreme Court two years ago.

Reid Wilson covers national politics and Congress for The Washington Post. He is the author of Read In, The Post’s morning tip sheet on politics.



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