Gov. Nixon vetoes HB 253; legislation's $800 million price tag would jeopardize vital public services and undermine economic growth | Governor Jay Nixon

Gov. Nixon vetoes HB 253; legislation's $800 million price tag would jeopardize vital public services and undermine economic growth

June 5, 2013
Springfield, MO

SPRINGFIELD - Gov. Jay Nixon today joined teachers, administrators and board members at Parkview High School in Springfield to discuss his veto of House Bill 253, calling the bill's $800 million price tag a fiscally irresponsible experiment that would undermine the state's economic and fiscal health and jeopardize funding for education and vital public services.

"With a price tag of $800 million, this legislation is an ill-conceived, fiscally irresponsible experiment that would hurt our economy and jeopardize funding for education and other vital public services," Gov. Nixon said. "Writing a bad check and saying you'll figure out a way to pay for it later might make sense in Washington, DC and some other states, but it's not how we do things in Missouri."

In a September 2011 report, the State Auditor recognized that Missouri has the seventh-lowest state taxes as a percentage of personal income.  In 2012, the Federation of Tax Administrators ranked Missouri the fifth-lowest in per capita state taxes in the country, representing a lower tax burden than all of our surrounding states.  Moreover, a 2012 report by Ernst & Young and the Council on State Taxation ranked Missouri's effective business tax rate as the eighth-lowest in the country. 

"The level of reductions necessary to accommodate Senate Substitute for House Bill No. 253 would be the equivalent of closing all of our state prisons, eliminating entirely the Department of Mental Health, or cutting all funding to our colleges and universities," the Governor's official veto letter states.  "Senate Substitute for House Bill No. 253 would undermine the very foundation of our long-term economic growth and our strongest economic development tool-our educational system."

"Missouri can't afford to put state funding for our public schools in jeopardy with unaffordable and irresponsible tax cuts," saidDr. Carter Ward, Executive Director of the Missouri School Boards' Association. "We need to be making more investments in education, especially in early childhood education, not cutting the revenue available to fund our public schools. Quality public schools are not only important to our children and families, they're also vital to the economic health and vitality of our state.  That is why we applaud Governor Nixon for vetoing this ill-conceived legislation and will work with our elected representatives and other stakeholders to ensure it does not become law."  

The Civic Council of Greater Kansas City, a membership organization of chief executive officers of the largest corporations and professional partnerships in the Kansas City metropolitan area, had urged the Governor to veto the legislation in a May 21 letter.

"Missouri already has a very competitive tax and regulatory environment," said Donald J. Hall Jr., Chair of The Civic Council of Greater Kansas City. "Missouri must maintain quality public services to remain competitive.  An excellent K-12 education system and world class, affordable colleges and universities that produce a skilled, 21st Century workforce, an efficient transportation infrastructure and reliable public safety are essential to our state's success. The Civic Council believes that HB 253 will result in a significant loss of state general fund revenues necessitating drastic cuts to funding for education (pre-K, K-12 and higher), social services and infrastructure.  That is why we urged Governor Nixon to veto House Bill 253 and applaud him for doing so today."  

The Governor also reiterated his concerns that House Bill 253 raises taxes on Missourians who take prescription medication. Since 1979, Missouri law has exempted prescription drug costs and co-pays from state sales tax.  Language in Section 144.030 of House Bill 253 would repeal this exemption, resulting in an estimated $200 million tax increase on Missourians who take prescription medication.

"Missouri is a low tax state, and we're going to keep it that way," Gov. Nixon said. "This legislation would increase taxes on seniors' prescription drugs, while giving special breaks to lawyers and lobbyists. That's not the way we do things here in the Show-Me State. House Bill 253 costs too much, accomplishes too little, and puts our budget and our economy at risk."