Dec 06

Your Money, Your Health and Your Job: Looking Ahead to the 2014 Legislative Session

by Mike Ferguson

Note: This week’s program was recorded prior to Governor Nixon’s calling of the Special Session to consider tax incentives for Boeing.

(St. Charles, MO) – What lies ahead for Missouri lawmakers in 2014 and what does that mean to us?

This week on “Missouri Viewpoints”, two advocacy groups – one from the right and one from the left – talk about that and what they will be pushing for when the State Legislature reconvenes next month.

The consensus is that money will be front and center. Conservatives want Republicans to take another swing at a broad-based tax cut plan that addresses both personal and business taxes. That idea passed the Republican-dominated Legislature this year only to meet its demise when the GOP fell short of overriding Governor Nixon’s veto.

MWSnap138Americans For Prosperity’s Missouri State Director, Patrick Werner, believes the political momentum favors a tax cut of some kind.

“Where we are going into 2014, it’s no longer ‘do we need a tax cut?’, it’s more of ‘what should the tax cut look like and how much should it be?”

Former Democratic State Representative Jeanette Mott Oxford is now the Executive Director of the Missouri Association for Social Welfare. She wants to see changes to the state’s tax system, but not across the board cuts. Her idea is to lower taxes on those with low incomes, many of whom now pay the same rate as Missouri’s highest income earners.

Mott Oxford wants to see state government put more into education, social services and health care, particularly mental health care.

MWSnap139“We could adjust our tax table, change some features of our tax plan and make it so that lower income people received an earned income tax credit and that we also produced some revenue for these kinds of needs that I named earlier.”

Republican leaders say the state needs a more business friendly tax system to lure employers to the state. To them, that means including business taxes in the equation. Democrats have called that a “race to the bottom” that they believe will hurt the economy because of a lack of funding for crucial state services.

Werner doesn’t buy that argument and says the state could be left behind economically if we are not more competitive with taxes.

“To the north of us, you have the Governor of Iowa who proposed a tax cut. You have the Governor in Indiana, Governor Mike Pence, who proposed an across-the-board tax reform measure. Governor Jindal down in Louisiana; this is happening all over the states and governors and legislatures are seeing a net return on their value. So to say that providing a tax cut or tax reform measure aren’t helping your economy, that’s just incorrect.

“There are examples all of this country where those measures are bringing new revenues and new dollars to their state.”

Mott Oxford doesn’t believe lowering business taxes will attract jobs to Missouri, saying employers are primarily concerned with finding things including natural resources, the right skilled workers and access to transportation outlets before they worry about tax rates.

“Off all the states that have a corporate income tax we’re, like, lowest in all of those 46 states and if it hasn’t made prosperity burst out all over our state already, I’m not sure why we would believe that going farther than we’ve gone would make it work now.”

One area of agreement between Werner and Mott Oxford during the program is the call for reform of Missouri’s tax credit process. Werner says that’s the process where government picks winners and losers while Mott Oxford calls it robbing from our neighbors.

Calls for tax credit reforms have been made the last few years in the Legislature but nothing substantial has developed in terms of changing the process or limiting the credits and incentives.

While a Republican attempts to cut taxes will likely be back in 2014, so with a Democratic attempt to accept federal incentives and increase the number of Missourians on the Medicaid roles. As part of the Affordable Care Act, Washington is offering pay for the increase in Medicaid coverage for three years. Missouri will take on a small but annually growing percentage of the cost after that.

Republican leaders say it would be bad for the bottom line in the long run. Mott Oxford hopes lawmakers take the deal this time around.

“The projections say that we would not be in the red about it [Medicaid expansion] for about a decade, at least. In the meantime, because it’s going to create a number of jobs in our state and lower the cost of our health insurance which should be good for our economic climate, I think it’s unlikely that we’ll get to a situation where we can’t pick up the tab.

“We can’t go on with things like the way they are now.”

Werner wants all options on the table when it comes to health care, including fixing inefficiencies within the system now and dealing with fraud that costs the system (and taxpayers) money now.

“The goal is to get folks better healthcare. If that means expanding it outward and reforming it in the process, absolutely, but the Legislature still has a responsibility to take a look at its budget. We just can’t put 200,000, 300,000 new people on roles and expect that we can afford to pay for all that.”

AFP-MO is promoting what they call a “Path To Prosperity” plan to lawmakers for the upcoming session.

The Missouri State Legislature will convene for the 2014 Regular Session the second week of January.

On the Web:

Americans For Prosperity-Missouri: http://americansforprosperity.org/missouri/

Missouri Association for Social Welfare: http://www.masw.org/

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