The Coalition for Missouri’s Future is appalled supporters of state tax cuts would once again bring in an extremist from outside Missouri, as they did with Rick Perry last summer, to attempt to rally support for yet another misguided tax cut scheme.
Leaders from across the state have been speaking out about the devastating impacts of Senate Bill 509. Just last week, civic leaders in Springfield indicated that revenue cuts from SB 509 would:
- “Cost millions – resulting in fewer teachers and larger class sizes” — Nixa Superintendent Stephen Kleinsmith
- “Threaten our ability to provide even the most basic education to Springfield students” — Springfield Board of Education
- Put at risk services to those living with disabilities, “making it more difficult for them to live independently” — Shelby Butler, Southwest Center for Independent Living
- “Be a slap in the face” to seniors with fixed incomes who can’t afford the increased taxes and fees that would likely result from the bill. — Jim Clemmons, AARP
Unlike extremists trotted into Missouri for a dog and pony show, our local leaders understand the disastrous impact of Senate Bill 509 on our children and families.
Who are Missourians going to trust, an extremist from outside the state with an ideological agenda, or the tireless leaders of our communities, who devote themselves every day to educating our children, ensuring that mental health needs are met, and who strive to ensure that our communities are great places to raise a family?
Civic leaders from Southwest Missouri gathered today to express their grave concerns regarding the impact of Senate Bill 509, which if vetoed by the Governor, could soon be the subject of a veto override attempt by the Missouri legislature.
“Senate Bill 509 would result in drastic cuts to classrooms across the state,” said Nixa Superintendent Stephen Kleinsmith. “The state is already underfunding our districts, and this legislation would cost millions – resulting in fewer teachers, larger class sizes, and reduced educational offerings.”
SB 509 is estimated to cost between $620 and $800 million annually when fully implemented. However, a provision recently identified by Governor Nixon’s office could eliminate the top income tax rate altogether, ballooning the impact to $4.8 billion annually. This provision will create years of legal and tax policy chaos and uncertainty, and could be devastating to state services.
“Even the most conservative interpretation of SB 509 would be devastating to the educational opportunities we’re able to provide our students,” said Springfield School Board member Gerry Lee. “As a result, state cuts would put pressure on school boards statewide to ask voters to increase local property taxes to make up for school funding shortfalls.”
Although supporters of the bill claim that so-called “triggers” would protect education and other services, the triggers are really just a smokescreen. The triggers don’t even keep up with inflation, let alone account for already depleted and underfunded services.
“Services that assist individuals living with disabilities have been cut repeatedly during the recessions of the last decade,” said Shelby Butler, Access Coordinator for the Southwest Center for Independent Living. “Additional cuts would damage the quality of life of thousands of Missourians, making it more difficult for them to live independently.”
Missouri’s economy is already outpacing its tax-cutting neighbors. While the wealthiest Missourians might see significant tax cuts, average Missouri families would benefit little. Moreover, while the tax cuts in SB 509 won’t create jobs, the required service cuts will harm Missourians.
“Seniors with fixed incomes can’t afford the increased taxes and fees that will likely result from this bill,” said Jim Clemmons, AARP Regional Volunteer Director. “And for seniors struggling to make ends meet, cuts to services like home-delivered meals and other community supports would be a slap in the face.”
The Washington Missourian | Bill Would Have ‘Critical’ Impact on District | By Karen Butterfield
Union School Superintendent Steve Bryant said he’s disappointed in all three Franklin County representatives who voted to send Senate Bill 509 to Gov. Jeremiah Nixon.
Reps. Dave Schatz, Paul Curtman and Dave Hinson all voted for a tax cut bill that would have a “critical” impact on education.
“According to the simulation provided by the Department of Elementary and Secondary Education, schools in Franklin County will lose about $4.8 million,” Bryant said. “It would cost the Union District alone around $918,000.”
Senate Bill 509 includes a 25 percent tax deduction for “business income,” often reported by wealthier individuals, such as lawyers and lobbyists, with LLCs or corporate partnerships.
Bryant said the district is in the process of trying to hire teachers to broaden course offerings to students and to make class sizes smaller.
“We couldn’t begin to do those things (if the bill takes effect),” he said.
Gov. Nixon is expected to veto the bill, however, that decision could still be overridden.
Nixon issued a statement April 18 on the possible impact of the bill.
“These new numbers show that if the Legislature succeeds in punching a $620 million hole in our state budget with this unaffordable giveaway to special interests, it’s our students and schools who will pay the price,” Gov. Nixon said.
“Senate Bill 509 would drain hundreds of millions of dollars annually out of our K-12 schools — weakening our economy, undermining our stable business climate, and putting full funding of the foundation formula out of reach. Missourians want good schools and good jobs, not another dangerous scheme to defund our K-12 classrooms,” he added.
According to the fiscal estimate produced by the Legislature, Senate Bill 509 would reduce state revenues by more than $620 million annually when fully implemented.
Nixon said students need to be prepared to compete worldwide.
“But instead of investing in public education, this Legislature has chosen to funnel money away from our classrooms and into the pockets of lawyers and lobbyists who need it the least.
“The choice facing members of the Legislature has never been clearer: They can support Senate Bill 509 or they can support public schools, but they cannot do both,” he said.
Nixon has been vocal on his desire to fully fund the K-12 foundation formula, which determines the amount of dollars a school district needs to adequately educate students annually.
The state foundation formula is underfunded by $600 million this year.
Legislators recently passed Senate Bill 509, a dangerous tax scheme that would threaten Missouri’s economy. In the name of giving special tax breaks to corporations and the wealthy, Missouri would lose up to $800 million annually. Missouri’s schools, which are already significantly underfunded, would suffer dramatic funding cuts under SB 509 at a time when businesses are looking for educated workforces.
- SB 509 would undermine our state’s economy, hurt Missourians’ quality of life and make Missouri less attractive to business investment. SB 509 is a reckless tax scheme that will cost nearly $800 million per year once fully implemented. To put this in context, $800 million is fully one-fourth of state funding for K-12 schools. $800 million is more than what Missouri spent this year on public colleges and universities. $800 million is more than what Missouri spends on mental health each year. The spending cuts required by SB 509 would leave Missourians with more crowded classrooms, higher college tuition, eroding health and mental health care for children and seniors, and diminished public safety.
- SB 509 would hurt all sectors of Missouri’s economy – education included. Though SB 509 supporters claim that they have protected education and other vital services with a so-called “trigger” that would require growth in state revenue prior to tax cuts taking effect, the reality is that these triggers are just a smokescreen. The triggers don’t even keep up with inflation, so existing services would start to fall behind.
- SB 509 would hurt K-12 and higher education, making Missouri’s workforce less competitive. State funding for local school districts is already more than $600 million below the legally required amount. SB 509’s tax cuts would result in further spending cuts, ensuring Missouri could never fully fund our schools. Likewise, the state’s severe decline in higher-education investment has resulted in tuition nearly doubling for Missouri public university students over the past decade. SB 509’s risky tax scheme would require further steep tuition increases, making a college education less affordable at a time when employers are looking for a highly educated workforce.
- SB 509 would create costly loopholes, allowing businesses to game the system. SB 509 creates a new business-income deduction that would encourage businesses to game the system. Contrary to proponents’ claims, this loophole would fail to create new jobs.
- Missouri’s economy is already outpacing our tax-cutting neighbors. Missouri is adding jobs at a much faster rate than our neighboring states. Both Kansas and Oklahoma have recently cut taxes, but their economies are not thriving as promised. In fact, since their tax cuts took effect, Kansas is struggling to fund local schools and tuition for some public colleges increased by 9% in one year. The state is cutting services even through it increased its state sales tax, and local communities are increasing local taxes to try to make up for some of the state funding cuts.
- A provision in the legislation will create years of legal and tax policy chaos and uncertainty, and could be devastating to the state budget. Some legal experts have interpreted bill language to actually eliminate the top income tax bracket altogether, at a cost of $4.8 billion annually. While other experts disagree, a lengthy court battle is likely and would wreak havoc on Missouri’s economy, regardless of the outcome.
- If SB 509’s risky experiment fails, it would cause Missouri lasting damage that can’t easily be fixed. The state constitution restricts Missouri’s ability to raise taxes. This means that SB 509’s tax cuts cannot be overturned once implemented. Even if lawmakers realize they made a mistake during the phase-in of the cuts, they will not be able to stop them or restore Missouri’s revenue. Once made law, there will be no turning back.
- SB 509 would make it more expensive for Missouri to fund roads and major building projects. Credit rating agencies, which currently give Missouri a top-notch AAA credit rating, are likely to frown on the SB 509 tax cuts. This could hurt Missouri’s credit rating and raise the interest rate the state must pay to borrow money to fund major projects, like roads and buildings.
- SB 509 would pressure localities to raise property taxes. State funding for services would plummet in the wake of SB 509’s cuts. This would result in increased pressure on localities to make up the funding difference through property-tax hikes.
- Missouri is already a low-tax state. Further cuts are unnecessary to make us economically competitive. Research from the University of Missouri ranks Missouri’s taxes at or among the lowest when compared to our eight neighboring states. Even the conservative, anti-tax Tax Foundation ranks Missouri as the 16th best in the nation for business tax climate, easily surpassing our neighbors.
The Legislature recently passed SB 509, a tax scheme that when fully implemented would cost nearly $800 million per year. In context, the amount would be the equivalent of one-fourth of state funding for local K-12 schools, or more than what Missouri spent this year on public colleges and universities. It is also more than Missouri spends on mental health each year. The spending cuts required by the tax cuts would result in more crowded classrooms, higher college tuition, eroding health and mental health for children and seniors, and diminished public safety.
A comparison of the foundation formula funding under Gov. Nixon’s recommendations and under SB 509 shows that Missouri schools will lose $223 million if SB 509 becomes law. A district-by-district breakdown shows that every single school district in the state will lose funding under this bill. A total of 53 of Missouri’s 520 school districts will lose at least $1,000,000 under SB 509’s risky tax scheme.
Governor Nixon summed up the situation “The choice facing members of the legislature has never been clearer: they can support Senate Bill 509 or they can support public schools, but they cannot do both.” read more…