Nixon, schools: Veto override spells bad news for students
Supporters of a state tax reform bill stopped in central Missouri Sept. 4 to discuss why they believe overriding Gov. Jay Nixon veto of the legislation is good for the state’s economy.
Meanwhile, the governor, along with educators statewide – including local superintendents, continue to oppose the legislation, asserting that what's "good for the economy" would be bad for Missouri students.
Carl Bearden, executive director of United for Missouri, along with three state legislators — Rep. Denny Hoskins (R-Warrensburg), Sen. Dan Brown (R-Rolla) and Rep. Keith Frederick (R-Rolla) — all agreed that Missouri needs to stay competitive with other states that have passed similar tax cuts.
“The status quo just simply won’t get us to where we need to be competitive not only with our neighbors but nationally,” Bearden said. “I think House Bill 253 is a great first step toward making us competitive.
“You don’t generate more revenue by raising taxes,” Bearden said, adding that if the income tax burden on people is reduced, people get to keep more of their money. And when they do so, they are more likely to spend it, he said.
One of the provisions of the bill states that it would create a 50 percent income tax deduction for all small businesses phased in over five years.
Bearden said that could mean employees would get to keep their job at a small business because that small business gets to keep more of its money. It also could mean employees could get a raise or promotion at the small business because it got to keep more of their money.
Frederick agreed with Bearden, saying that people react to policy decisions and “on the side where you reduce taxes, they react by expansion of their businesses.”
St. James Schools Superintendent Joy Tucker says this isn't the way to go, as the bill would ultimately take funds from classrooms statewide.
"We're looking at losing $1.2 million over two years, which is the equivalent of 22 teachers," Tucker said. "If they would run on the formula they put in place - they being the legislators – and fully fund the formula we would all be quiet."
Rolla Schools Superintendent Aaron Zalis says the effects of HB 253 could be anywhere from $1.1 million to as much as $1.9 million in cuts with its “full implementation.
"Not all of the cuts will be teachers, but 80 percent of any school district is people," Zalis said. "We do our best ... that's not any fun because everything is important to someone."
According to a recent press release from Nixon's office, cuts resulting from HB 253 to public school budgets "would be the equivalent of eliminating between 5,438 and 9,411 teachers."
The bill co-sponsored by House Speaker Tim Jones asserts that Nixon continues to withhold millions from schools and disability services.
Jones recently was quoted by The Quincy (Ill.) Journal as saying "Nixon said, 'If you don't get on board with me, in opposing an override of my veto, then I'm not going to give you your money.' He's (Nixon) taken hostages instead of just discussing the issue."
Zalis was clear when he stated that he is not a fan of dragging the public education system into political discourse. But it has been difficult to offer fiscal solutions in a proactive manner when schools "have been playing defense" for so long.
"We're already $600 million underfunded," Zalis said. "We're fiscally conservative here, and I'm not opposed to reforming tax laws ... I will broadly say, regardless of what side of the aisle you’re on, I don't appreciate being placed in the center of that. I just for once would like to be out of the crosshairs and not have the kids used as a reason why we should or shouldn't do something."
Further evidence used by the governor from Standard & Poor’s and Fitch and Moody’s show that the state’s AAA credit rating could be affected by HB 253, according to the governor's press release. A downgrade would increase the interest on state and local bond issues.
Tucker, who addressed the issues surrounding HB 253 in a recent column, wants the community to understand that a veto override will not go unnoticed.
"I think it will benefit the wealthy, but all the schools in this area will be hurt," she said. "When you start cutting people, you can't help but hurt our students. And if we're not here for them, what are we here for?"
Oklahoma cut personal income taxes in 2005, and Bearden said, “when they did that, of course, (people thought) the world was going to end, which is exactly what we’re hearing here in Missouri … what they (Oklahoma) actually saw was an increase in revenue.”
Kansas also cut income taxes, and that is why Hoskins believes several companies that were headquartered in Missouri are moving to Kansas.
“These companies aren’t moving from Kansas City, Mo., over to Kansas because the weather is better over in Kansas nor do I believe it’s because the educational system is better. I believe the educational system as well as infrastructure is better here in Missouri,” Hoskins said.
“They’re moving because they believe the economic and tax policies in Kansas provide a better business environment for those companies,” Hoskins added.
Hoskins said states such as Tennessee, Oklahoma, Texas and Kansas, which have revamped their tax policies, have seen growth.
“Do we want to be the state … where you get a great education so you can go to Kansas, Tennessee, Oklahoma and Texas and find a job? I don’t think that’s where we want to be in Missouri,” Hoskins said.
Bearden said Missouri is losing $44 million annually to Texas as Missouri businesses move there for “greater and better opportunities.”
While some people were worried when Texas Gov. Rick Perry recently came to Missouri looking to attract businesses to move to his state, Brown said, “He’s doing what a governor should do.”
Frederick added, “If we’re worried that ‘oh my goodness, Gov. Perry is coming here, he’s trying to attract businesses to Texas,’ well, what is it about Missouri’s environment that leaves an opening for a state like Texas to try to attract our businesses? We should have an environment in Missouri where Gov. Nixon can go to Texas and lure them with the environment we have instead of the other way around.”
Bearden said HB 253 would make Missouri more competitive in that area. “Make your tax policy, your economic policy, be competitive, and you will not see a Gov. Perry.”
Missouri has been ranked 47th in the country in economic growth out of 50.
“Are we striving to be 50th? Because it doesn’t seem to bother the governor when someone picks up and leaves,” Brown added.
Hoskins said Nixon has been using “scare tactics” and scaring educational institutions into believing that “if we override (the veto of) House Bill 253 on Sept. 11, that on Sept. 12, they’ll have to close their doors and turn the lights off. And that’s simply not going to happen.
“We want to have jobs in Missouri for every Missouri citizen as well as those graduates from UMR (now known as Missouri University of Science and Technology),” Hoskins said.
Hoskins said the bill doesn’t refer specifically to education or senior services.
“It talks about tax and economic policy and how we can grow Missouri so we do have more general revenue to adequately fund education and those senior services,” Hoskins said.
Brown recalled a discussion with employees from the state department of mental health and Brown told them, “The only reason you don’t have the money that we appropriated for you this year if because the governor withheld it. Why aren’t you mad at him?”
Bearden said the projected reductions in revenue that the opposition argues will happen are actually static.
“They have absolutely no thought of what the economic activity will be by letting more people keep more of their money and spending it in their communities,” Bearden said.
Hoskins noted that HB 253 states that the annual tax rate reductions will only be triggered if yearly state revenues grow by at least $100 million.
Brown said he has received some emails from constituents who believe they will lose their jobs if the veto is overridden but said they are misinformed.
“We got a few problems in the bill. What bill that passes doesn’t have some problems? We’re going to have to fix to a few things,” Brown said.
Frederick said he believes there’s a good chance of Nixon’s veto being overridden during the veto session, which begins Sept. 11.
“I think it’s got a pretty good shot of passing … That’s the input I’m getting from constituents that we understand reducing taxes makes Missouri a more competitive environment for the job producers and that helps our families … I get a few on the other side.”