State Senate passes a no-compromise tax-cut bill

By Phill Brooks

JEFFERSON CITY — By a straight party-line vote, Senate Republicans passed an income-tax bill last week that legislative staff estimate ultimately would cost the state $621 million per year in lost tax revenues.

The bill’s sponsor, Sen. Will Kraus, R-Jackson County, had sought to work out a deal with Gov. Jay Nixon to craft a bill Nixon would sign.

The original compromise Kraus presented to the Senate included Nixon’s demands for major education funding increases and cuts in tax breaks for real-estate developers before the income-tax cuts would take effect.

Faced with opposition from fellow Republicans in the Senate, Kraus abandoned his compromise package and went back to a straight income-tax reduction without the governor’s provisions.

While praising Kraus’ efforts to work out a bipartisan package, a couple of Senate Democrats attacked the no-compromise alternative.

“Now is not the time to be giving 620 to 650 (million dollars), whatever the final tab for this bill ends up being, to lose this revenue when we already cannot fund the obligations we have. It’s not wise fiscal policy,” said Sen. Jason Holsman, D-Kansas City.

But Kraus argued each year of the phased-in tax cut would not occur unless there had been a significant growth in tax collections in a prior year.

“This bill is a people’s tax cut. This is a bill that sends taxpayer dollars back to the people, puts more into the economy and will grow the economy,” Kraus told the Senate.

A day before the Senate vote, Nixon attacked the bill in language similar to that he used in defending his veto of a similar tax cut bill in 2013.

“Once again, the choice facing members of the General Assembly is clear: They can invest in good schools and create good jobs or they an support reckless fiscal experiments, but they cannot do both,” Nixon said in a statement emailed from his office.

The bill now goes to the House.