This article originally appeared in the St. Louis Beacon, Aug. 13, 2013: Missouri Gov. Jay Nixon is once again traveling the state in his continued efforts to defend his veto of the tax cut bill known as HB253. He made two stops Monday in the St. Louis area.
In Kirkwood, however, two prominent Republicans showed up to dispute the governor’s arguments: state Sen. Eric Schmitt, R-Glendale, and state Rep. Rick Stream, R-Kirkwood.
Schmitt was a key backer of the bill in the state Senate, while Stream is chairman of the House Budget Committee. Their appearance appears to be part of a GOP move to have its allies show up at the governor’s stops. They may also be countering recent comments by House Speaker Tim Jones, who observed it could be difficult to round up the required 109 House votes to overturn the governor's action.
The governor made a point of acknowledging Schmitt's and Stream’s presence, while the two legislators held their verbal fire until he had left the lectern.
Still, the politeness failed to mask their dueling passions.
Nixon's pitch against HB253 was the same he has given for weeks: The bill is flawed, cuts corporate and special-interest taxes too much, and unfairly increases sales taxes on prescription drugs and text books.
He contended that HB253’s proposed cuts could derail the state’s economic recovery, and he called for the General Assembly to sustain his veto – and not override it during next month’s veto session.
“Fiscal responsibility is just as important when times are good as when times are tough,’’ the governor said. “This bill’s costs are so staggering, its provisions so flawed’’ that independent credit-rating agencies have warned of a possible downgrade in the state’s credit rating.
Nixon made similar points at a roundtable discussion Monday night at the University of Missouri-St. Louis.
The Missouri Republican Party on Tuesday fired off a barrage of rebuttals, accusing the governor of complaining about the tax-cut bill without offering an alternative.
"Logging over 5,000 miles on his taxpayer-funded airplane since his regretful veto, Nixon is trying to scare Missourians into thinking he knows better how to spend their money than they do," said state GOP executive director Shane Schoeller.
Nixon said Monday that he has approved four major tax-cut bills since taking office -- all but one directed at businesses. He repeated his contention that he's willing to discuss some sort of tax-cut compromise next session -- but not HB253.
Nixon: Focus is on sales tax hike on medicine
As he has previously, Nixon noted that the state’s sales-tax exemption for prescription drugs has been in place since 1979. Removing that exemption, as the tax cut bill doesm would unfairly target the ill and the elderly, says Nixon at every opportunity. The estimated cost to taxpayers is $200 million a year.
Nixon got support from Paul Hueseman, a pharmacist and owner of Greentree Pharmacy, where the governor’s event was held.
Hueseman said he wasn’t taking a position on the bill in general, but he is concerned about the sales tax hike on prescription drugs. Hueseman said he feared it would result in cash-strapped people failing to fill their prescriptions. Failure to take prescribed medicine is a key reason people end up in hospitals or nursing homes, costing the public even more, added Hueseman.
The governor said the public should “be very skeptical’’ of legislators’ claims – including those of Schmitt and Stream – that the sales-tax exemption would be restored next session.
But afterward, Schmitt and Stream said they were committed to fixing the prescription-drug issue “the very first thing next session.” Stream said that Nixon also has failed to tell the public that the removal of the exemption wouldn’t take place, under the bill, until 2015.
Nixon’s statements, said Schmitt, are “meant to rouse people’s passions and spread a lot of misinformation.”
Schmitt said he was particularly disturbed by Nixon’s stop earlier Monday in Cape Girardeau, where the governor discussed a new report claiming that HB253 would lead to cuts in state mental-health services, including those provided to autistic children and their families.
Schmitt is the father of an autistic child, and led the drive a few years ago to require insurance companies to cover some services. Schmitt contended that Nixon was trying to scare such families, and said the move was ''inappropriate."
Nixon was citing a report made at the behest of the Missouri Mental Health Commission, which concluded that the tax-cut bill could force cuts of $164 million annually in services provided by the Department of Mental Health.
Schmitt said the threat of such cuts in mental health-services was bogus. He emphasized that the tax cuts would be phased in over 10 years and that the bill requires $100 million in additional revenue each year for that year’s cut to go into effect.
Nixon has said that the phase-in is sharper than proponents portray. He added the provisions would have required a tax cut in 2009, when lower tax revenue forced him to make more than $500 million in budget cuts.
Backers: Tax cuts' benefits are overlooked
Schmitt contended that the real issue is that the state needs to jumpstart its economy. “We’re 48th in GDP growth,” he said. “We haven’t had an opportunity like this in 100 years, so I think it’s important to seize the moment and allow people to keep more of what they earn.”
The Coalition for Missouri's Future, a pro-veto group, disputed Schmitt's contention Tuesday by highlighting a recent Commerce Department report that shows Missouri was 25th in GDP growth in 2012.
Missouri's growth outpaced all but two of its neighboring states in 2012, according to the Bureau of Economic Analysis. The exceptions were Oklahoma and Iowa.
Tax-cut advocates note that Missouri's 2 percent GDP growth rate in 2012 was still below the national average, among the states, of 2.5 percent. Schmitt's figure was referring to a 10-year average, a spokeswoman for Grow Missouri said.
Stream said that Nixon’s estimates of the amount of state income that would be lost are “flawed’’ and improperly assume that Congress will approve the Marketplace Fairness Act, which would allow states to collect sales taxes from out-of-state online retailers.
Should the act become law, Nixon maintains that provisions of HB253 would require even larger state cuts – up to $1.2 billion a year.
“The bill isn’t going to come up for a vote” in the U.S. House, Stream said. “The Marketplace Fairness Act is not going to become law.”
Stream also is upset over Nixon’s action to withhold $400 million from the current budget, some of it from education, until the General Assembly has acted on any override attempt during next month’s veto session.
The governor's office has estimated that the House Bill 253 on schools in the St. Louis region would be significant. When fully implemented, the cost each year could be $10.3 million for St. Louis City schools; $746,000 for St. Charles schools; $4.7 million for Hazelwood schools; and $3.4 million for Ferguson-Florissant schools.
Stream said he plans to introduce a bill next session to restore the $400 million to the budget, if Nixon fails to release the money.
Both legislators agreed that the override battle will be fought in the House. The Senate is widely expected to have more than the necessary 23 override votes, but the House will vote first since that’s where HB253 originated.
State Sen. Scott Sifton, D-Affton, also was at Greentree Pharmacy to show his support for the governor’s veto. Noting that the House will vote first on HB253, Sifton said he will be very distressed “if I have to cast a vote in the Senate.”
That means, he explained, that the House backers had succeeded in rounding up the needed 109 votes to override the governor.
Nixon, meanwhile, was to be back on the road Tuesday, making the same pitch in Warrensburg and Kansas City. The only question was whether he'd run into more Republican lawmakers.
