special session – Missouri House of Representatives Newsroom

Income tax cut, reform likely topics in expected special session

A tax break for most Missourians and a restructuring of the state’s income tax brackets will likely be considered by legislators in a special session that Governor Mike Parson (R) is expected to soon call.

*Representatives Peter Merideth (left) and Cody Smith (Photo: Tim Bommel, Missouri House Communications)*

That’s according to House Budget Committee Chairman Cody Smith (R-Carthage), who says he’s looking forward to seeing what the Governor outlines in a plan to be aimed at helping Missourians facing high prices and high inflation. The top Democrat on the Budget Committee, Peter Merideth (D-St. Louis), says he wants a plan that goes beyond changing income taxes, so that all Missourians would be helped; not only those who pay that.

Governor Parson earlier this month vetoed a proposed $500-million tax rebate plan sent to him by legislators in May, saying he prefers a permanent tax cut. He has said he will call for a special session of the legislature to consider that cut.

Smith, who spearheaded that tax rebate plan as the best proposal thought possible at the time, said he would also prefer a permanent cut. He spoke to Parson on Tuesday to get a better idea of what the governor might propose.

“We are busy now collaborating with the senate and the governor himself to try to find a starting point and then from that point the legislature will take over and will hopefully put forth a good product, at the end of the day, for the governor to sign,” said Smith. “It’s important that we try to keep this simple and try to make it as impactful to as many Missourians as possible. I think the income tax is the best way to do that, and trying to simplify the tax code in the process I think is also a worthy goal.”

Merideth said he and fellow Democrats were glad that the rebate plan was vetoed, but he’s concerned that a cut to the income tax won’t help the Missourians who need help the most.

“A third of Missourians don’t make enough money to pay [the income tax], and those are, of course, the third of Missourians that are having the hardest time right now, so if all we’re focused on is a tax cut on income, that’s not really a big help for people,” said Merideth.

“That said, our income tax brackets are completely out of date. We haven’t had updated brackets in like 100 years. Democrats have actually long advocated for updating those to a more progressive tax rate structure. Now, we have yet to see what that proposal’s going to look like but there’s a path that we could get on board with,” he added. “Democrats are generally supportive of relief for those that make the least and generally resistant to relief for those that are doing just fine, at the expense of our long-term budget.”

Smith agrees that the state’s brackets are outdated and should be revised, if not eliminated, and doing so would help all income earners.

“Our highest tax bracket in Missouri is for anyone that makes over $9,000 annually. At one time that was a considerable amount of money … but now most folks who work at all generally make more than $9,000 per year … so we [would be] helping lower income folks by addressing that top line number. Additionally I think we can take a look at some of the tax brackets on the lower end and see if we can reconfigure those or eliminate those entirely so that folks on the lower end of the income spectrum won’t pay taxes up to a certain amount. That would provide relief on those lower income folks.”

Merideth thinks permanently cutting the income tax right now is not a good idea. He said the state is in a great position with revenue right now, but the next time there’s a downturn, cuts made now could put the state in a bad position.

The governor has expressed confidence that Missouri’s good fortune will continue, and Smith agrees.

“I would guess that we may have a general revenue surplus in excess of $2-billion by the time we come back to the next legislative session and that is just unprecedented … we’ve got federal money set aside for Medicaid, we’ve got general revenue dollars sitting in the state’s treasury for all purposes, and I think there’s never been a better time to cut taxes and still be able to protect the priorities that we have in the budget,” said Smith. “I think we’re probably looking at 3 to 5 years where we are very well situated even after a tax cut.”

Smith said while the state is enjoying increased revenues and never-before-seen surpluses, Missourians are dealing with high inflation, high gas prices, and other factors that are causing many to struggle. He said this is the right time for the legislature to do something to help.

“Rather than issue stimulus checks, which is talked about in Washington from time-to-time, certainly we’ve seen that … I believe the best way to combat things like inflation is let [Missourians] keep more of their own money,” said Smith.

Merideth said he and other Democrats would also like to see the legislature talk about things besides the income tax, such as eliminating taxes on groceries and other essentials.

The governor has said he is also planning to have the legislature consider six-year extensions to tax credits under the Missouri Agriculture and Small Business Development Authority. He vetoed a bill that would have extended them by two years.

Dates for a special session have not been set.

Houses passes vehicle tax credit bill, answering call of special legislative session

The Missouri House has passed legislation aiming to allow people to keep getting multiple tax breaks when trading in more than one vehicle on a new one.

House Speaker Elijah Haahr and Representative Becky Ruth discuss the passage of a vehicle tax credit bill, in response to the special session’s call. (photo: Tim Bommel, Missouri House Communications)

The chamber’s Republicans say the language of House Bill 1 will allow Missourians to keep doing what they’ve been doing and say it will help all consumers. Many House Democrats voted for the bill, though some in that caucus decried it as “corporate welfare” and said it was a topic unworthy of a special session.

The House voted today, 126-21, to send the bill to the Senate.

Governor Mike Parson (R) called a special session to coincide with today’s annual veto session to deal with the issue in response to a Missouri Supreme Court ruling in June. The Court said state law allows a tax break to be awarded only on one vehicle, when multiple vehicles are traded in toward a new one.

Sponsor Becky Ruth (R-Festus) said her bill will give much-needed tax relief to Missourians from all walks of life.

“A young mother who is trying … maybe she’s got two cars that don’t run well and she’s trying to upgrade to a good, dependable car to take her child to school; to get to work herself. This impacts someone that may have lost their spouse and they need to trade in those two cars to be able to get a good, reliable car. This impacts senior citizens who are trying to downsize. This impacts just normal, everyday working people,” said Ruth.

Shrewsbury Democrat Sarah Unsicker agreed the bill will affect some individuals, but said it will also let corporations keep from paying their “fair share.”

“There are approximately 14-thousand vehicle sales estimated to be impacted by this bill. The Department of Revenue cannot estimate how much this tax credit costs the state or how many vehicles are commercial sales,” said Unsicker. “If we make this just about individuals like those the sponsor referenced I would support this bill. However, I believe this bill is, to a substantial extent, corporate welfare, and therefore I will be voting against it.”

An amendment that would have made the tax credit available only to individuals and businesses of 12 or fewer employees was voted down.

Democrats argued that the tax credit issue was not pressing and did not merit the calling of a special session.

“This Supreme Court Decision didn’t just help us figure out, this summer, that this was an issue. Since 2008 there have been 17 administrative hearings to ask this question of whether folks are allowed to trade in multiple cars to offset the car they buy. In all 17 administrative hearings they found they couldn’t,” said St. Louis representative Peter Merideth (D). “Regular people, regular folks were being told they couldn’t claim this credit, but we didn’t consider it an emergency.”

House Minority Leader Crystal Quade (at podium) and other House Democrats were critical of the legislature’s special session not including discussion of Medicaid eligibility and gun laws. (photo: Tim Bommel, Missouri House Communications)

Ruth argued that the law needed to be clarified, and addressing it in a special session makes sure no eligible vehicle trades will happen without the award of tax credits, thanks to a window of 180 days before or after a new vehicle purchase in which to offset the owed sales tax.

“If you’re one of those people since the Supreme Court decision on June 25, 2019, that’s trying to figure this out … if we do this now, those folks are still going to be able to take advantage of that credit. If we wait and we do this next session they’re not going to be able to take advantage of that credit,” said Ruth. “The people that come before them, the people that come after them, will, and this could possibly set our state up for lawsuits.”

Ruth calls the legislation is a way to keep Missouri law consistent.

“We simply went in and made this clear and direct … so that the citizens of Missouri can continue to do business the way they are accustomed,” said Ruth.

“The problem that I have with that is the ‘business as usual’ that we’ve been doing has been established by the Supreme Court to be against the law,” said Kansas City representative Ingrid Burnett (D). “Rather than take to task the [Department of Revenue], who has been breaking the law, we have decided to call a special session to come here to change the law.”

House Democrats said lawmakers’ time would have been better spent debating changes to gun laws, and several among them filed proposals to that end.

They also wanted to see attention given to Medicaid enrollment. House Minority Leader Crystal Quade (D-Springfield) said Missourians with life-threatening medical conditions are losing coverage.

“There were several important issues that the legislature could have taken up in special session that could have made a positive impact on all Missourians. This was not one of them,” said Quade.

House Speaker Elijah Haahr (R-Springfield) said any time a special session is called people will point to other issues it could have dealt with.

“That’s not really my decision. If the governor thinks it’s important … we were coming up here anyway for the veto session. It’s an issue that we could work on. It’s an issue that, as you saw, had pretty broad support,” said Haahr.

Haahr said he has asked members of his caucus to research what some other cities in the nation have done to reduce violent crime, with the aim of preparing a legislative proposal for the regular session that begins in January.

As for Medicaid enrollment, Haahr said decreases in enrollment are due to factors including an improved economy and changes in 2016 to the Affordable Care Act (ACA); and a review of Medicaid eligibility that has seen ineligible recipients being taken off the program’s rolls. He said if a need for hearings on the issue is presented to him, he will call for them.

Missouri legislature called into special session for STEM, treatment court bills

The Missouri Legislature will convene for a special session next month to reexamine two bills vetoed by Governor Mike Parson (R).

One bill dealt with guidelines for treatment courts. The other allows high school computer science courses to count toward graduation requirements for math, science, or practical arts credits; and aims to begin preparing students at an earlier age for the opportunities they could have in the job market.

In Parson’s veto messages, he said the treatment courts bill appeared to violate the state constitution’s prohibition on legislation covering multiple subjects. He objected to a provision in the education bill that he said seemed to narrow a bidding process down so that only one company could qualify.

Representative Kevin Austin (photo; Tim Bommel, Missouri House Communications)

Treatment courts in Missouri provide a court-supervised, comprehensive treatment program as an alternative to jail time. Participants must complete a rigorous regimen including interventions and supervision in order to complete the program. Drug courts, juvenile treatment courts, and veterans’ courts are some examples of these programs.

House Bill 2562 was sponsored by Springfield Representative Kevin Austin (R). He said in the past the legislature has dealt with treatment courts in a “piecemeal” fashion, and the main goal of the bill was to consolidate the various types of treatment courts and lay out best practices.

“When we start a new treatment court in a county or a circuit, the judge that has that can have some direction and have some guidance on what to do … this is going to provide some of those directions and best practices, which are also evolving as we learn more about treatment courts nationally,” said Austin.

The bill would also allow defendants in a circuit that lacks a treatment court to be transferred to one in another circuit, with certain approvals.

Austin said treatment courts benefit not only participants, but also their families and communities, and they save the state money through factors such as decreasing incarcerations.

The House handler of the education legislation is Representative Travis Fitzwater (R-Holts Summit), who has worked on STEM (science, technology, engineering and math) bills for several years. He doesn’t believe that Senate Bill 894 needed to be vetoed, but is “thrilled” the governor and legislative leadership saw the issue as important enough to revisit it in a special session.

Representative Travis Fitzwater (photo; Tim Bommel, Missouri House Communications)

“I think we just need to make sure that we broaden it to the extent that it makes it a process where more software companies can have access to it,” said Fitzwater.

Fitzwater said the STEM portion of SB 894 is aimed at middle school students.

“Why it’s so important to have the curriculum in middle school is because there are studies that show that 25-percent of high schoolers don’t have any idea what’s available to them in career fields when they graduate, and that’s a real problem,” said Fitzwater. “The reason to have it early it middle school is the earlier the better in giving them some career paths that may interest them or to weed out maybe some fields that they’re not interested in as well.”

Fitzwater said by readdressing his legislation in a special session rather than waiting for the new session to begin in January, its provisions might not have to be pushed back another school year. This would allow another grade level of students to benefit from it.

Austin said the sooner the legislature can deal with the treatment courts issue, the sooner the state’s courts can begin implementing the most effective practices. It would also make a difference for defendants who could benefit from treatment courts but might not have access to them, especially in cases in which the transfer language would apply.

The special session will begin Monday, September 10 and will overlap with the annual veto session, which was already scheduled to begin Wednesday, September 12.

Additional audio: Kevin Austin says treatment courts offer an alternative to jail time, but a defendant must go through a rigorous process to successfully complete the program and faces that jail time if he or she fails.

“Treatment court is not a ‘get out of jail free’ card. It requires a ton of hard work by the defendant or the participant in the drug court … We’re changing lifestyle habits so it’s not something we can do in six months. It takes time. The participant or defendant realizes that and actually signs a contract agreeing to this lengthy, arduous process.”

Legislature called back for extraordinary session to consider Southeast Missouri jobs issue

State lawmakers will return to Jefferson City next week for a special legislative session. Governor Eric Greitens (R) is calling them back to address an economic development issue in Southeast Missouri.

Representative Don Rone (at microphone) (photo; Tim Bommel, Missouri House Communications)

The legislature did not pass in its session that ended last week language that backers say could allow one company to proceed with plans to reopen the Noranda aluminum smelter at Marston; and another company to build a new steel mill at New Madrid, both in Southeast Missouri.

Both companies hope for lower utility rates that would allow those facilities to be profitable. To consider lower rates the Public Service Commission (PSC) says it needs the legislature’s approval.

Representative Don Rone (R-Portageville) attached that language to several bills in the final days of the session, but it did not become law. He said people in that region are in desperate need of jobs, especially after Noranda closed last year eliminating nearly 900 jobs. He said these two projects could create more than 500 new jobs.

Greitens wants legislators to come back and focus on that one issue.

“I cannot thank the governor enough for the people of Southeast Missouri – all of Southeast Missouri,” said Rone. “I can’t tell you what it means to these people here to have hope, and the governor saw fit to give us hope by calling a special.”

The House voted for Rone’s language 148-2, and its support in that chamber is expected to remain high, but at least one senator who Rone said blocked it in that chamber – Senator Doug Libla (R-Poplar Bluff) – remains opposed to the proposal.

Rone said he believes the bill can get through both chambers and to Greitens.

“[Senator Libla] can keep his position. We’ve never asked – in the many conversations I’ve had with him and his people – we’ve never asked him to change his vote. We’ve always asked him just to allow it to come to the floor and let the people in the Senate vote,” said Rone. “All we’re wanting to do is let democracy work, let the 34 senators take vote their conscience, and see where it takes us.”

Rone said the entities behind the two facilities are expected to decide soon whether to give up on progressing with their plans for those two sites. He said if the legislature can quickly pass his bill he is confident those companies will postpone their decisions until they can meet with the PSC.

“I would think that [Governor Greitens] was well aware of the timeline and how critical it is,” said Rone.

The call for the special session comes one week after Rone called attention to the issue in a passionate floor speech in which he called out Libla and two other senators, saying they were, “heartless,” “selfish,” and “egotistical,” in rebuffing his proposal.

The House and Senate will begin the extraordinary session at 4 p.m. Monday.