- Associated Press - Tuesday, February 18, 2014

St. Joseph News-Press, Feb. 16

Link tax cuts, tax credits:

Here’s a thought about tax credits and tax cuts: Lawmakers may choose not to put them in the same bill, but it’s smart to put them in the same conversation.

There is word out of the Missouri House that Speaker Tim Jones views the issues as separate and he is opposed to linking them. This becomes a problem because Gov. Jay Nixon has signaled he is willing to deal but only if certain conditions are met.

Gov. Nixon said last week he would sign a tax cut (contingent on new revenue growth), but only if legislators:

- Agree to fully fund the public school foundation formula (currently more than $550 million short of what is called for under state law).

- Limit low-income housing tax credits to $110 million annually (down from $135 million) and historic preservation tax credits to $90 million annually (down from $140 million).

- Remove a provision for a business income tax cut.

Republican Sen. Will Kraus of Lee’s Summit, who is shepherding the legislation in the Senate, projects a cut of one-half of a percentage point in Missouri’s 6 percent individual income tax rate would leave about $400 million in the pockets of taxpayers annually.

“My goal is to cut taxes on Missourians,” says Sen. Kraus, who previously has pushed business and personal tax cuts that would top $900 million when fully implemented. “To take what you know you can get is better than to pass a bill that you know you can’t get.”

On the surface, this appears to be a constructive effort to find middle ground. Below the surface, lots of moving parts suggest this is far from over.

Gov. Nixon’s proposal has the potential to delay tax cuts for years as the state struggles to fully fund the school foundation formula. Meanwhile, true believers in the need to provide new incentives to businesses are left wanting - as they were after the governor’s veto last year.

As for the two tax credits, Republican Sen. Brad Lager of Savannah is among those who have advocated much deeper cuts in the past.

Even without a resolution on the near horizon, it’s good our Democratic governor and leading Republican legislators are talking about their priority issues. Schools, tax cuts, tax credits - all are connected when the public’s limited resources are footing the bill.


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