Missouri’s governor and state budget director say that tax exemptions passed by the General Assembly last month will mean reductions in local sales tax revenue.

Missouri’s governor and state budget director say that tax exemptions passed by the General Assembly last month will mean reductions in local sales tax revenue.
A fiscal analysis conducted by the Missouri Office of Administration’s Division of Budget and Planning of two Missouri House bills and six Missouri Senate bills passed by the Legislature would reduce state and local revenues by more than $776 million a year.
This includes a $425.1 million annual reduction in state sales tax collections and a $351.4 million reduction in local sales taxes, which provide revenue for services in cities, counties and fire and ambulance districts, according to a news release from the governor’s office.
The bills that Nixon said will affect local revenues are HBs 1296 and 1865, SBs 584, 612, 662, 693, 727 and 860.
Many of the bills offer tax breaks for marine fuel, farmers markets, used manufactured homes, Term III prescription drugs, laundries, recreation and amusement venues and vehicles older than 10 years.
The impact on state revenue includes sales taxes that are dedicated to K-12 schools (also called the Proposition C sales tax), highways, conservation, state parks, and soil and water conservation programs.
According to Nixon’s office, state lawmakers passed on May 16, the final day of the general session, more than a dozen special tax carve-outs and loopholes, which were not accounted for in the fiscal year 2015 budget that was passed the week prior.
As a result, the governor said, the budget as passed by the state legislators is out of balance and will need to be corrected.
“This 11th-hour free-for-all on the final day of session will make it harder for local governments to provide the services Missourians count on,” Nixon said. “We’re talking about firefighters and cops, libraries and ambulance services, snow plows and health inspectors, public transit and road repair.
“Missourians deserve an explanation for why legislators rushed through $776 million in special breaks and exemptions on the last day of session, without accounting for even a penny of these costs in the budget they sent to my desk.”
The Rolla Daily News sought comment from state Sen. Dan Brown and Rep. Keith Frederick, but they had not responded as of press time Wednesday night.
The bills could reduce state and local revenue as early as Aug. 28 of this year.
According to the state budget office, assuming there is a proportional reduction in local revenue, the estimated reduction in revenues to Phelps County would be $736,700 a year.
The estimated reductions for the five incorporated cities in the county are as follows:
• Rolla: $1,239,096
• St. James: $117,534
• Doolittle: $8,495
• Newburg: $2,856
• Edgar Springs: $3,246
The budget office also stated the St. James Ambulance District could potentially lose $37,754 in revenues.
The potential loss of sales tax revenue was an agenda item on the Phelps County Commission’s meeting agenda Tuesday.
“I think it’s devastating these were passed without anyone being aware of the damage done to counties and cities,” said County Clerk Carol Bennett. “It’s disturbing these just passed through.”
Bennett said County Treasurer Carol Green had recommended having county officials sign a letter, urging Nixon to veto the bills, but no action was taken Tuesday.
District One Commissioner Larry Stratman said he wanted to wait to talk to Brown or Frederick before commenting. Presiding Commissioner Randy Verkamp and District Two Commissioner Gary Hicks made no comment.
Rolla City Administrator John Butz said Tuesday he has a hard time discerning how the state budget office arrived at the estimated revenue reductions.
“They’re interesting numbers,” Butz said, but noted he thinks the estimate for Rolla may be inaccurate.
The city administrator said he believes the approximate reductions listed do not reflect the city’s half-cent recreation sales tax that expired Dec. 31, 2013.
Butz said he is unsure if all of the exemptions would impact Rolla, but said two that would be relevant are exemptions for recreation venues and for vehicles older than 10 years.
“It would be a serious hit to our budget,” Butz said. “Every time there is an erosion in our tax base, I get very concerned.”
Butz said these revenues traditionally have been the way local governments fund law enforcement, fire protection, parks and transportation.
Butz said he typically does not ask the council to write letters to the governor about legislation, such as these bills. Instead, he said he uses the city’s representation in the Missouri Municipal League for lobbying purposes.