On March 28, the Missouri House approved its version of the $29.23 billion state operating budget for the 2020 fiscal year. The budget process now continues on the Senate side of the building, with final agreement due by May 10, a week before adjournment of the 2019 Regular Session of the General Assembly. There is considerable anxiety as to whether the Senate will have to make significant cuts, given that state revenues were running $339 million below last year’s numbers as of March 22.
If the April 15 tax payments do not fill the gap, then hopefully elected officials will take a serious look at our outdated, unfair and inadequate tax system, instead of simply kicking the can down the road yet again. This is especially important in that many U.S. economists project that the nation will enter a recession by 2021.
One sign that our General Assembly’s tax cut fervor of the past two decades has gone too far is the increasing distance between actual revenue and the point at which we would refund money to the taxpayers due to the Hancock Amendment’s revenue cap. According to the Missouri Auditor’s report on the Hancock Amendment in 2018: ““For the fiscal year ended June 30, 2017, total state revenue was approximately $4.2 billion under the refund threshold.”
There are alternatives that would help our state raise the funds to adequately fund essential programs and services without harming the ability of Missouri households to secure basic human needs. An especially good idea worthy of consideration is the Tax Justice for a Healthy Missouri bill sponsored by Rep. Judy Morgan (D-Kansas City). Here are some features of her HB 1229:
- It would produce $961 million in new revenue for our state. (We can see the press release from the Missouri Chamber of Commerce and Industry now, decrying “a billion dollar tax increase!” But remember that we are more than $4 billion BELOW the Hancock revenue cap now as quoted from the Auditor’s report just above.)
- The tax brackets would be modernized to match modern realities, instead of being stuck where they were set in 1931. (Our top tax bracket is presently less than $9,000 per year in taxable income; $9,000 was a lot of money in 1931, but it is poverty-level in 2019.)
- Sixty-one percent of non-elderly Missouri households would receive a tax cut through HB 1229.
- Looking just at the bottom 80 percent of non-elderly households in our state, those with less than $101,000 of annual income, 76% would receive a tax cut.
- No one would pay more than 1.8% more in taxing than they are paying now. That increase is reserved for the richest one percent of Missourians, those making more than $485,000 annually (and averaging $1.4 million as income).
Unfortunately Rep. Morgan’s bill has not been assigned to a committee or scheduled for a hearing. Here are two actions that you are encouraged to take: 1) Email Rep. Morgan to thank her for filing this proactive and positive tax reform measure. Her address is[email protected]. And 2) Write a letter to your local newspaper, sharing the components in Rep. Morgan’s bill and stating that it’s important that Missouri consider such ideas if we are going to be strong in the coming recession. (I will be glad to send you additional information about the Tax Justice for a Healthy Missouri plan to prepare you to write that letter if you contact me at[email protected].)
In the words of the popular idiom: It’s time for Missouri to wake up and smell the coffee.
Jeanette Mott Oxford,