JEFFERSON CITY, MO. – Gov. Mike Parson said Missourians should see an increase in their paychecks starting in January, as long as lawmakers do their job during a special session.
Missouri has a surplus of money and Parson’s proposal is to give it back by lowering the state’s income tax. This comes after the governor rejected a tax rebate plan passed earlier this year by lawmakers. He said he didn’t like that not everyone in the state would benefit.
Another part of the game plan is to help one of Missouri’s largest industries: agriculture.
“It’s going to be a tough year for some of our farmers in this state,” said Chris Chinn, Director of the Department of Agriculture. “If you drive through the northern part of our state, the corn and soybean crops look amazing. If you go to the southwest portion of the state, they are really stressed.”
The Show-Me State is home to 95,000 farms, ranking second in the nation and third for beef cows.
“We have several ranchers in the southwest part of our state that has had to make some really tough decisions,” Chinn said. “Do I liquidate part of my herd to make sure I have enough hay, or do I buy more hay? The prices of hay are over $80 for a barrel of hay in some parts of the state.”
Part of the call for a special session is to reauthorize tax credits for farmers. Under the legislation passed by lawmakers this year, the tax credits expire in two years. The governor said that’s not enough time to get new projects started using the credits. Parson is asking for a six-year sunset provision.
“The bottom line, farmers took the short end of the stick,” Parson said. “If we’re going to give other businesses across the state tax advantages over our agriculture community then we need to rethink what we’re doing, and we need to fix it.”
Parson said there were too many special interests, lobbyists, and people involved who shouldn’t be involved in the legislation passed in the spring. The governor, a farmer himself, said earlier this year to fill up three tractors on the same day, cost him $500.
“I think about fertilizer prices tripling, what the cost of it does to business, what the feed costs, getting equipment,” Parson said. “We passed eight different incentives for businesses across the state, which I firmly agree on, and I signed into law. Agriculture, we took away from them last year, from the ranchers and farmers in this state.”
According to the U.S. Drought Monitor, there have been improvements in southern Missouri. Last month nearly 20 counties were in an extreme drought. As of Thursday, less than 10 counties fell under that category.
The Department of Natural Resources (DNR) provides daily updates on its website along with resources like access to water and hay for farmers.
Another part of the plan for the special session is to cut the state’s income tax rate from 5.4% to 4.8%.
“We can afford to give the people of Missouri the largest tax cut in our state’s history which means money in everyday people’s pockets,” Parson said. “If you draw a paycheck, you’re going to benefit from this tax cut.”
Last month, he vetoed a plan to give Missourians a $500 non-refundable tax credit based on last year’s filing. It was estimated to cost the state up to $500 million and would be based on last year’s filing.
The legislation said individual filers could get a rebate of up to $500, and married couples could see up to $1,000. However, there was an income cap in place, not allowing any individual who makes more than $150,000 a year or married couples with annual incomes over $300,000 to receive the rebate.
Parson’s reason for vetoing the tax rebate was because the General Assembly did not authorize spending the funds out of the correct amount which would violate the constitution.
“We can still maintain the highest levels of funding for education, for healthcare, for infrastructure, for workforce development in our state’s history,” Parson said. “Whether you’re on the low-income side, the senior side, if you’re drying a paycheck, you’re going to receive that benefit.”
The governor said there could also be a tax deduction for Missourians next year, lowing the standard deduction to $16,000 for single filers and $32,000 for joint filers. This means if someone earns $16,000 or less, he or she would not owe a state income tax.
Parson has been meeting with Republicans and Democrats about the plan. Earlier this week he met with Senate Democrats. Senate Minority Leader John Rizzo said his caucus is for a tax cut, but what’s to make sure it’s done the right way.
“We have a lot of programs and a lot of liabilities that we have to make sure that we’re making ends meet as a state before we start cutting taxes,” Rizzo said Tuesday. “They have been times when we’ve had special session where everything was worked out before we came down. We had a pretty good idea of what we were there to do. I didn’t get that feeling. I think this is very much still a work in progress.”
Also, this week, the Missouri Senate Conservative Caucus “disbanded.” Sen, Bill Eigel, R-Weldon Spring, along with four other Republican senators, Sen. Mike Moon (R-Ash Grove), Sen. Denny Hoskins (R-Warrensburg), Sen. Andrew Koenig (R-Manchester), and Sen. Rick Brattin (R-Harrisonville), released a letter Monday saying it’s time for the Conservative Caucus group to disband.
“The Conservative Caucus was never meant to be a permanent organization,” Eigel said. “We were seeing a series of votes that were really out of step with the GOP platform so, we operated as a group that would sometimes oppose these ideas.”
According to the letter, the caucus was formed back in 2018 and since then, “the statistics on voting records bear a striking contrast between Conservative Caucus-aligned Senators and colleague Republican members.” Parson said he believes there is a true effort to move forward.
“I think a special session is going to be a good test to see if people really want to get along and really move forward,” Parson said. “So, we’re all going to find that out. I’ve talked to the vast majority of senators and no great pushback from anybody.”
The governor plans to hold a press conference Monday afternoon to release the details of when special session will start.