Gov. Jay Nixon visited Chillicothe last Friday in Livingston County for a roundtable discussion with local officials about the impact of special breaks and exemptions passed by the General Assembly in the final hours of the legislative session and vetoed by the Governor earlier last week.
Together, provisions in these bills would reduce state and local revenues by up to $776 million annually, and were not accounted for in the budget passed by the legislature or in the budgets of the local jurisdictions they would impact. Most of these provisions would impact sales tax collections, and therefore would reduce local tax revenues.
â€śFrom fire protection to storm water management, these special breaks for special interests hastily passed by the legislature would undermine the basic public services these communities rely on to support the health, safety and quality of life of their citizens,â€ť Gov. Nixon said. â€śThese provisions would begin reducing revenues immediately, and with no guarantee that my vetoes will be sustained, these special interest giveaways will have to be accounted for with tough choices and dramatic spending reductions on the state and local levels.â€ť
Earlier last week, the Governor vetoed Senate Bills 693, 584, 612, 860, 727, 662, and 829, and House Bills 1865, 1296 and 1455, which contain more than a dozen special breaks for a variety of industries. If these bills were to become law, they are projected to reduce state revenue by up to $425 million annually and local revenue by up to $351 million annually starting in the fiscal year that begins on July 1. By reducing local tax revenues, these special breaks would undermine support for services including police, fire, ambulance, emergency services, parks, and other vital public services provided at the local level.
â€śHere in Chillicothe, we have a responsibility to keep our communities safe and provide the basic services folks count on,â€ť said Chillicothe Mayor Charles E. Haney. â€śUnfortunately, if the Governorâ€™s vetoes are not sustained, then our local budget will be in real trouble and local services like public safety will be at risk.â€ť
In a previous letter urging the Governor to veto the bills, Mayor Haney raised concerns about the cityâ€™s ability to maintain core services if revenue is reduced: â€śThe approval of these bills will be catastrophic to our fiscal viability. . . Ultimately, it will be our citizens that will suffer the consequences of diminished local services if we are required to cut our budget further in response to special interest tax exemptions granted by the Missouri General Assembly.â€ť
The bills vetoed by the Governor include new sales tax exemptions for recreation venues, fast food restaurants, power companies, data storage and processing, used vehicles, supplies and equipment used in electricity generation, and commercial laundries.
â€śAll across Missouri, communities have come together to pass local sales taxes to support local public services and capital improvements,â€ť Gov. Nixon said. â€śThese special breaks passed by the General Assembly would defy the will of the voters by siphoning these voter-approved resources away from their intended purpose, and into the pockets of the well-connected.â€ť
The reduced state sales tax revenue would also reduce funding from dedicated sales taxes for K-12 schools (also called the Proposition C sales tax), Highways, Conservation, State Parks, and Soil and Water Conservation Programs.
The loss of local revenue from these provisions could also impact repayment of voter-approved bonds issued to finance capital improvements such as county jails, county hospitals, fire stations, emergency management centers, road projects and other critical public infrastructure.