Gov. Jay Nixon today visited Farmington for a roundtable discussion with area local officials about the impact of special breaks and exemptions passed by the General Assembly in the final hours of the legislative session and vetoed last week by the Governor.
Together, provisions in these bills would reduce state and local revenues by up to $776 million annually, and were not accounted for in the budget passed by the legislature or in the budgets of the local jurisdictions they would impact. Most of these provisions would impact sales tax collections, and therefore would reduce local tax revenues, including funding for the Sheriff's Department and other emergency management services.
"In the final hours of session, the legislature passed a slew of special breaks for special interests without an honest analysis, threatening to undercut the basic public services citizens and businesses rely on," Gov. Nixon said. "From small towns to big cities, these provisions would begin reducing revenues immediately if these fiscally irresponsible bills become law. With no guarantee that my vetoes will be sustained, these special interest giveaways will have to be accounted for with significant spending reductions on the state and local levels. Even the General Assembly acknowledges the impact on local revenue alone would be in the hundreds of millions of dollars."
"More than 65,000 area residents count on our ambulance services for emergency medical coverage," said St. Francois County Ambulance District Administrator David Tetrault. "Any cuts to our budget would put our residents at risk. We appreciate Gov. Nixon for taking a stand against legislation that would drastically impact sales tax revenue, and we support any efforts to sustain his vetoes."
Last month, the Governor vetoed Senate Bills 693, 584, 612, 860, 727, 662, and 829, and House Bills 1865, 1296 and 1455, which contain more than a dozen special breaks for a variety of industries. If these bills were to become law, they are projected to reduce state revenue by an estimated $425 million annually and local revenue by an estimated $351 million annually starting in the fiscal year that began on July 1.
Even recent fiscal notes prepared by the General Assembly show that the special tax breaks would reduce local revenues each year by at least $223 million. Furthermore, those fiscal notes acknowledge that the true cost of many of these bills is unknown, and could exceed those estimates.
By reducing local tax revenues, these special breaks would undermine support for services including police, fire, ambulance, emergency services, parks, and other vital public services provided at the local level. The loss of local revenue from these provisions could also impact repayment of voter-approved bonds issued to finance capital improvements such as county jails, county hospitals, fire stations, emergency management centers, road projects and other critical public infrastructure.
The bills vetoed by the Governor include new sales tax exemptions for recreation venues, fast food restaurants, power companies, data storage and processing, used vehicles, supplies and equipment used in electricity generation, and commercial laundries.
"In communities across the state, including here in St. Francois County, citizens have come together to pass local sales taxes to support services like public safety," Gov. Nixon said. "The General Assembly's scattershot approach to reducing the tax base would defy the will of the voters by taking these voter-approved resources away from their intended purpose, and into the pockets of special interests with no real benefit to our economy."
The reduced state sales tax revenue would also reduce funding from dedicated sales taxes for K-12 schools (also called the Proposition C sales tax), Highways, Conservation, State Parks, and Soil and Water Conservation Programs.