House plan would ease late payment penalties, interest, in response to surprise tax bills

The House has given preliminary approval to giving Missourians a break on late payment of taxes, because many Missourians might have been surprised this year with a higher-than-anticipated tax debt.

Representative Dean Dohrman (photo: Tim Bommel, Missouri House Communications)

“I’m also frustrated with the situation that brought us here, but today we can’t do anything about that,” said La Monte representative Dean Dohrman (R), the sponsor of House Bill 1094“But today, as Winston Churchill once said, ‘We can do the best we can with what we got.’”

HB 1094 would block late payment penalties on tax debt owed to the state by individual taxpayers through the end of this year.  It would also waive any interest owed on such debt until May 15.  For those who might pay penalties before the bill would become law, it would require that those Missourians receive refunds.

The bill is a bipartisan response to an issue with the Department of Revenue’s tax tables that resulted in many Missourians being faced with greater debt than expected.  Lawmakers heard stories of individuals who anticipated a tax refund from the state instead getting hit with bills for hundreds, or even thousands, of dollars.

Representative Nick Schroer (R-St. Charles) is the vice-chairman of the House oversight committee that’s been investigating that situation.  He said the Department’s explanations have changed, and he blames its former director, who resigned last month amid the crisis.

Representative Crystal Quade (photo: Tim Bommel, Missouri House Communications)

“We still don’t really know the true cause of what is happening.  We’re still digging and trying to figure that out, but I think this is one way that we can lessen this tax burden on these people who … dollars count to these people, whether it’s diapers, groceries,” said Schroer.

That oversight committee has continued to schedule hearings to investigate what caused the problems and how the Department responded.

House Minority Leader Crystal Quade (D-Springfield) also sits on that oversight committee, and pre-filed similar legislation in December.  She said the Department knew about the tax issue as early as September yet didn’t act for months to notify taxpayers.  She said she’s frustrated the House is only now taking action.

“Tax day’s in five days.  If folks in this body … I mean I hate to say it; if we were really concerned about these surprise tax bills and what was happening to citizens, we would’ve dealt with this much, much sooner,” said Quade.

“I heard time and time again from the director of revenue as well as the liaison that this isn’t a lot of money – that we’re talking an average of $85 or it could be upwards of several hundred dollars, and as I said before we have [legislative assistants] in this building who are seeing swings of $3500,” said Quade.

Lawmakers including Columbia Democrat Kip Kendrick, another oversight committee member, want Missourians to understand that their issues with tax debt might not be over after this year.

Representative Nick Schroer (photo: Tim Bommel, Missouri House Communications)

“If they’re concerned with their bill this year then they need to go back and look at their W-4 because next year, 2019, their current year, it’s going to be a full four quarters of potential under-withholding and not just three quarters,” said Kendrick.

Republicans, including Noel representative and oversight committee member Dirk Deaton, maintain that while some Missourians could see greater tax bills this year, changes in the federal tax code mean their overall debt is down.

“Missourians are keeping more money in their pockets, so we’ve got to fix this withholding thing but at the end of the day Missourians, as they should, are keeping more of their hard-earned money,” said Deaton.  “That’s what I think people need to realize.”

Another favorable vote would send HB 1094 to the Senate.

Gas tax increase goes from legislature to voters on November ballot

The legislature is asking voters whether they want to increase Missouri’s gas tax to pay for road and bridge work and to boost support of the Highway Patrol.

Representative Jean Evans (photo; Tim Bommel, Missouri House Communications)

The House voted 88-60 to complete passage of House Bill 1460.  It would ask voters in November whether to increase the state’s fuel tax by two-and-a-half cents a year for four years – a ten cent total increase by July, 2022.  The current tax is 17-cents per gallon.

If passed, projections are the increase would generate about $421-million when fully implemented.  $128-million would be for local governments for road construction and maintenance.  The remaining $293.3-million would be appropriated by the General Assembly between the Department of Transportation to be used solely for road and bridge work, and the Highway Patrol.

Representative Jean Evans (R-Manchester) sponsored HB 1460, which was amended by the Senate to include the gas tax proposal.

“This is a vote to allow the people of Missouri a vote on how they want to pay for roads and bridges, how they’d like to fund their law enforcement,” said Evans.  “Send this vote to the people.  This is a vote for freedom and for safety.”

Kansas City Democrat Greg Razer said he was glad to see the House considering the ballot issue that would give the state a chance to take on pressing road and bridge work.

“We have these projects all over Missouri.  We need to address it.  This is a fantastic opportunity to allow the people of Missouri to make a decision on the future of our roads and bridges,” said Razer.

Kansas City Republican Kevin Corlew chaired the 21st Century Missouri Transportation System Task Force.  It recommended a gas tax increase to help support transportation funding.  He said whether such an increase will happen should be up to voters.

“Allow our citizens the opportunity on the November ballot to make a choice and to determine whether or not we can go forward with the 21st century Missouri transportation system, or will we be stuck with the transportation system that was built in the 20th century and continues to be funded with 20th century dollars.” said Corlew.

The House vote sent HB 1460 to the Secretary of State, who’s office is preparing it for the November ballot.  Many of the 60 “no” votes were cast by Republicans.

Representative Phil Christofanelli (photo; Tim Bommel, Missouri House Communications)

St. Peters representative Phil Christofanelli (R) called the proposal a “massive” and “deceptive” tax increase.

“The voters already had an opportunity to vote on raising taxes for transportation.  They said, ‘no,’ and here we are, coming back today, poll testing different ideas, how can we sell this idea that the voters have already rejected?”  said Christofanelli.  “We’re all going to go back to our districts – many of us in this [Republican] majority – and tell people how conservative we are, we are conservatives.  The voters believe that conservatives are here to shrink the size of government and not to grow the size of government, and that is exactly what we’re doing today.”

Representative Rocky Miller (R-Lake Ozark) said this measure is flawed and he will oppose it even though his district needs road maintenance and improvements.

“My district will come after me like a crazy person for voting against this, but there’s no way in the world I’m voting for this, and if it passes I’m going to work my guts out to kill it at the poll,” said Miller.

HB 1460 was originally a bill that would waive state tax liability on cash prizes awarded to Olympic medalists.  Another provision in the bill would create an “Emergency State Freight Bottleneck Fund,” that would pay for road projects costing $50-million or more that would relieve bottlenecks or delays of 20 minutes or more on Missouri roads.

The bill would also allow alternative fuels to be taxed at a substantially equivalent rate by 2026.

Because it was changed to include the ballot language for the gas tax, the language voters will see on the ballot will also ask them whether the state should waive tax liability for Olympic medal winners and could include language about the Bottleneck Fund as well.