Good morning. It is great to be here in Kansas City at the Henry Bloch School of Management, and I appreciate President Wolfe for welcoming us here today.
I also want to recognize Betsy and the entire Civic Council of Greater Kansas City for their strong leadership on behalf of families and businesses in this region.
Just two days after the end of this year's legislative session, the Civic Council hand-delivered a letter to my office outlining their concerns about House Bill two-fifty-three, and the negative impact it would have on our state's economic competitiveness.
Joining us is a broad coalition of educators and executives...advocates for the elderly and for infants... principals and parents...who represent the many Missourians who share these grave concerns.
As Governor, creating good jobs and growing our economy have been my top priorities. And as the business leaders with us will tell you, it's a well-established formula:
You need a predictable, stable economic climate... so that businesses can invest with confidence, and plan for the future.
You need a low tax burden and a fair tax code, which lowers the cost of doing business - and creates a level playing field for them to compete.
You need an educated workforce with the skills businesses need to succeed in the 21st century global economy.
A good credit rating is also vital, because it sends a signal that our state is a safe place to invest, and manages its finances responsibly.
Working together, this is exactly the type of stable, pro-growth environment we have created in Missouri -through some very challenging economic times.
We balanced the budget every year, without a single tax increase.
In fact, we passed a targeted tax cut for small businesses that create jobs and phased out the franchise tax.
Eliminating this outdated double tax will save employers $80 million a year.
Instead of balancing the budget on the backs of taxpayers, we made government smaller, smarter and more efficient.
We cut spending...slashed red tape... and reduced the state workforce by 4,500 positions.
We made greater use of technology and put more state services online. And those boards and commissions that weren't serving their purpose? They no longer exist.
Today, Missouri is recognized as one of the best states to do business in the nation.... with some of the lowest taxes in the nation.
Independent studies show us with the eighth lowest business tax rate... the seventh lowest taxes as a percentage of personal income...and the fifth-lowest in per capita taxes in the nation - lower than all of our surrounding states.
Folks, Missouri is a low-tax state - and we're going to keep it that way.
Standard & Poor's and Fitch also recently reaffirmed our perfect Triple-A credit rating, citing our balanced budgets and solid fiscal management.
As a result of this proven, fiscally conservative approach -- our economy continues to grow.
In April, Missouri's unemployment rate dropped again, as employers added 12,000 new jobs.
Corporate giants like Ford, Monsanto, and Express Scripts - whose global footprints allow them to invest anywhere - are creating jobs here in Missouri.
Recently, a major Chinese automotive parts supplier, after comparing Missouri with our neighbors to the west, decided to build its new $45 million manufacturing facility right up the road in Riverside.... right here in the Show-Me State.
So today, the question before us is simple: will we continue on this proven, steady, fiscally responsible path?
Or will we veer recklessly off course?
The answer is clear: now is the time to build on the solid foundation of economic growth and fiscal discipline we have built - not undermine it.
That is why, earlier this morning, I vetoed House Bill two-fifty-three.
House Bill two-fifty-three is an ill-conceived, fiscally irresponsible experiment that would jeopardize funding for vital public services...It would increase taxes on seniors' prescription drugs, while giving special breaks to lawyers and lobbyists... and it would undermine our state's fiscal health.
Clearly, there are many problems with this bill, and I'd like to discuss some of them here today.
First, the price tag. House Bill two-fifty-three would cost our state more than 800 million dollars a year. And if that sounds like a lot - it is.
800 million dollars is the equivalent of eliminating all state support for public higher education...or closing all our prisons... or shutting down the entire Department of Mental Health.
That's a price Missourians are simply not willing to pay.
While writing a bad check saying you'll figure out a way to pay for it later might make sense in Washington and some other states, it's not how we do things in Missouri.
Just like Missouri families do around the kitchen table each month, we balance our budgets... we keep a close eye on how much we spend, and how much we take in.
And when the lawmakers in Jefferson City don't abide by those principles - it's ordinary Missourians who pick up the tab.
By punching an $800 million hole in our state budget, this bill would jeopardize our ability to fund the basic public services that support our economy and our way of life.
Services that keep dangerous criminals off our streets... teach our kids the basic building blocks of knowledge... deliver meals to our elderly parents and grandparents...and help infants with developmental disabilities grow up healthy and strong.
Gutting the budgets of public schools and public safety for the sake of an economic experiment is a gamble Missourians are not willing to take.
Now, supporters of this bill say safeguards will prevent tax cuts from taking effect unless revenues grow by a certain amount. They say these provisions will ensure this bill is affordable, and prevent cuts to public services in the case of an economic downturn. Unfortunately, that's just not the case.
The truth is, special breaks for pass-through business income are conveniently exempt from these so-called safeguards and would take effect immediately...a 230 million dollar loophole that would erode the strong fiscal foundation we have worked so hard to build.
Even in cases where limited protections do exist, they are virtually meaningless. Under this bill, tax cuts would have taken effect in 2009, during the depths of the economic recession.
Second, House Bill two-fifty-three is riddled with drafting errors... careless mistakes... and unintended consequences.
- For example, the bill would repeal longstanding sales tax exemptions on prescription drugs and text books... imposing a more than $200 million tax hike on college students, seniors and others.
- The bill lavishes benefits on certain kinds of businesses, while discriminating against the majority of others...
- A sloppy definition of "business income" would provide a strong incentive for firms to game the system, while further increasing the bill's cost.
- Cuts to withholdings could jeopardize previous commitments made to businesses that are the basis of long-term investments in our state.
- Another poorly drafted section would immediately impose hundreds of millions of additional liabilities -- retroactively -- if the federal Marketplace Fairness Act became law.
And the list goes on....
Especially when it comes to the tax code, Missouri families and businesses deserve proven, carefully-considered policies, not risky experiments.
Finally, there is the issue of the values this bill reflects.
Legislation that guts funding for K-12 education in order to let a lawyer's LLC exempt half of his income cannot be called fair.
Legislation that gives the lobbyist who helped write it a tax cut of fifty percent, but increases the cost of a college student's text books cannot be called balanced.
Legislation that rewards businesses on the basis of the paperwork they file, rather than the economic activity they create, cannot be called conservative.
Legislation that haphazardly rewrites the tax code, and arbitrarily picks winners and losers cannot be called sensible.
Legislation that increases the cost of seniors' prescription drugs, and decreases the cost of opening a law office does not reflect our values as Missourians.
House Bill two-fifty-three would cost too much, accomplish too little....and mark a radical departure from the proven, fiscally responsible policies that are moving our state forward.
We're here at the Bloch School for a reason. Endowed by one of the world's greatest businessmen and committed to educating next generation of entrepreneurs and innovators, this world-class institution illustrates the stakes of the decision before us.
Today, we renew our commitment to fiscal responsibility and fairness.
We commit to raising our goals higher, and helping our children dream even bigger.
... To training our workforce to innovate and invent...
... and to protecting the shared priorities that make our state the greatest place on earth to live, work and raise a family.
Thank you for your leadership... for your service... and for your continued support in this effort to keep building a brighter and more prosperous future for our state.