Missouri Gov. Jay Nixon says he will veto an income tax cut that he considers to be "an unfair, unaffordable and dangerous scheme."
The Democratic governor visited a school for the disabled in St. Louis on Thursday to announce that he would veto the bill. Nixon says the tax cut would drain funding for public education and state services.
Republican legislative leaders have said they will try to override the veto, and are optimistic that they have enough votes in the House and Senate to do so.
The legislation would gradually cut the state's top individual income tax rate from 6 percent to 5.5 percent and phase in a new 25 percent deduction for business income reported on personal tax returns. The tax cuts would begin in 2017, but only if state revenues grow by at least $150 million.
Nixon maintains that it could lead to a downgrade of Missouri's AAA credit rating from Moody's, and that would cost millions of dollars in higher interest rates. He noted that Kansas just saw a downgrade and some are blaming tax cuts.
"Despite all this evidence, supporters think the way to grow the economy is to take money out of our classrooms," Nixon said. "It shows just how wrong they are."
In its downgrade note, Moody's said Kansas is not adhering to traditionally conservative financial management practices and cited in part revenue reductions from tax cuts that have not been fully offset by recurring spending cuts.
Nixon said the Senate bill if implemented would have "real and dangerous consequences," and cost at least $620 million in revenue.He said Republicans and Democrats have worked together for decades to keep Missouri on a fiscally responsible path and protect it's top-notch credit rating.
"Moody's independent analysis should be a wakeup call for the Legislature to set aside these dangerous schemes and start working on a responsible approach that will protect public education, our credit rating and our economy," Nixon said.
Republicans say Nixon's concerns aren't justified and the tax cuts will spur the economy.
"The Legislature believes citizens are more equipped to spend their money rather than the government," said Missouri House Speaker Tim Jones, Republican from St. Louis County. "Low taxes will spur the economy. We are not done with this issue and plan to revisit it yet this season. I invite the governor to put away his veto pen and join us in this effort that will benefit hard-working Missourians."
The bill's sponsor, Sen. Will Krause, R-Lee's Summit, said it is a reasonable tax cut and would only take affect if certain thresholds are met for state revenues growing.
"This is a people's tax cut," he said. "This is a reasonable tax cut with a lot of built-in protection for Missouri's budget. We won't give up easily on enacting the first broad-based tax cut in 100 years."
"This is a bad bill and deep down even the people who voted for it know it," he maintains.
Copyright 2014 KCTV (Meredith Corp.) and Associated Press. All rights reserved.
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