For years, generations really, the traditionally Republican Kansas has been a more business-friendly state than the traditionally Democratic Missouri. That seems to be changing.
Republicans now have super majorities in the Missouri Senate and the House as well as a Republican governor, however troubled. As late as the year 2000, Democrats held majorities in both houses of the Missouri legislature and had a Democratic governor as late 2016.
Undeterred by the bad press coming out of Kansas, on Thursday Missouri lawmakers approved a cut in individual tax rates from 5.9 to 5.5 percent starting next year.
If the state meets revenue targets, the individual rate would gradually drop to 5.1 percent. In Missouri, the governor is legally required to submit a balanced budget. The legislature is not required to pass a balanced budget, but the governor is required to sign one. To offset an expected loss in revenue from the individual tax cut, the legislature is prepared to phase out a federal income tax deduction.
“This is probably the best we’re going to get this year,” Speaker Pro Tem Elijah Haahr, R-Springfield, told the St. Louis Post-Dispatch. The plan is considerably more modest than the much discussed Brownback tax cuts. “The Kansas thing is such a bogeyman. It’s so annoying,” said Haahr.
In the early hours of Friday morning, the Senate passed a separate measure to cut the corporate tax rate from 6.25 percent to 4 percent beginning in 2020. The House still needs to approve that measure.
There is little doubt that Gov. Eric Greitens will sign both measures if they reach his desk. Despite his obvious legal problems, Greitens has been actively campaigning for a tax cut for months.
The Senate did, however, move late Thursday to approve a bill that would increase the state’s gas tax to 27 cents per gallon to be phased in over the next five years. This revenue would be dedicated to build and repair bridges and highways. The House still needs to approve this.
The current Missouri gas tax is 17 cents, one of the lowest in the nation. The Kansas gas tax is 24 cents. If Missouri approves a gas tax increase, look for Kansas to do the same.