JEFFERSON CITY, Mo. (AP) - Missouri Gov. Jay Nixon said Friday that the budget approved by lawmakers is severely out of balance because of a “cavalcade of special-interest tax breaks” passed on the final day of the session.
As majority Republican lawmakers proclaimed their annual session a success, the Democratic governor simultaneously denounced it as a failure and pledged to veto bills or cut budgeted spending to balance the state’s finances.
Nixon pointed to eight bills passed Friday that he said could reduce state revenues by between $263 million and $483 million.
Among those was a bill passed in the final hour before the 6 p.m. adjournment that would create sales tax exemptions for fitness centers, electric companies and computer data centers, among other things. Separate bills would waive sales taxes at farmers markets, for commercial laundries and for people who pay membership dues so they can get first-crack at tickets for events held at facilities such as the Sprint Center in Kansas City.
The tax breaks for energy and materials used by data centers has long been a priority for Missouri business groups and was touted by Republican and Democratic lawmakers alike as a means of attracting more high-tech businesses to the state. The tax break also would apply to existing businesses.
“Missouri has lost multiple projects to Kansas, to Oklahoma, to Arkansas because of not having the tax structure setup that these other states do,” said Tracy King, vice president of governmental affairs for the Missouri Chamber of Commerce and Industry.
House Speaker Tim Jones said he was “excited” that the data center incentives finally passed, just a week after lawmakers enacted a general income tax cut by overriding Nixon’s veto.
“So many good paying jobs are ahead, because Missouri has finally put out the sign on our doorstep that we are wide open for business,” said Jones, R-Eureka.
Nixon’s budget director, Linda Luebbering, estimated the data center tax break could cost the state $220 million annually in revenues.
The Legislature last week approved a $26.4 billion operating budget for the fiscal year that starts July 1. It boosts spending for education, restores some Medicaid benefits that were cut a decade ago and finances the construction of a new mental health hospital in Fulton, among other things. The budget contains scores of new spending items, even though state revenues have recently fallen short of projections.
Nixon said the lost revenues from the tax breaks aren’t accounted for in the budget.
“In short, as a result of the Legislature’s actions today, the budget they presented to me is seriously out of balance,” Nixon said.
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