JEFFERSON CITY — Missouri lawmakers left town Thursday after two days of talks failed to generate consensus on a plan to cut state taxes amid a historic budget surplus.
Although no one predicted a quick resolution, the lack of an agreement shows the Republican-controlled Legislature remains far from finding a path forward on Gov. Mike Parson’s call for reducing state income tax rates from 5.3% to 4.8%.
Senate President , R-Sullivan, downplayed the inaction, saying his goal is to bring together the various viewpoints in the Senate, as well as work with House leaders to find a resolution.
“It’s still early. But we’ll get to a place where we know where we’re headed,†Schatz told the Post-Dispatch.
At issue is a call by Parson for the Legislature to act on a $700 million package of tax-related provisions, including the income tax cut.
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Parson wanted lawmakers to return Sept. 6, but leaders in both the House and Senate delayed the start until Wednesday in hopes of hammering out a plan.
Schatz assigned nearly 20 bills to the Senate Appropriations Committee Thursday, which will begin meeting next week to winnow down a final version.
Among the proposals awaiting debate are further reductions to the state’s main business tax rate.
Sen. , R-Manchester, filed a plan that would reduce the current 4% corporate tax rate to 3.5%. The rate would be lowered to 3% if the state meets certain revenue growth figures.
Sen. , R-Springfield, introduced a plan to issue rebate checks of $325 to individuals and $650 to married couples. He also would reduce the tax rate to 4.5% if revenue triggers are met.
Schatz said the discussions have not been contentious.
“We’ve had good conversations with the House. We’ve had good conversations with our colleagues. We’re trying to circle around with everybody,†Schatz said.
The House also gaveled in Thursday, but only in an informal, procedural manner. The chamber took no action and, like the Senate, is scheduled to return next week.
Parson has been largely absent from the Capitol this week after he traversed the state in August selling the tax cut to both lawmakers and voters.
He said the state can afford to lower taxes because the state general revenue fund through July 31 had a surplus of more than $4.2 billion. Tax revenues have increased nearly 24% this fiscal year.
Along with an increase in income tax revenue, Missouri’s budget has been fueled by more than $9.8 billion in federal pandemic aid since April 2020.
However, even with the federal dollars, Missouri has struggled to provide services because of a shortfall in workers.
The Missouri Department of Mental Health, for example, has a waiting list for more than 600 developmentally disabled residents in need of intensive services. At the Missouri Veterans Commission, hundreds of nursing home beds for former military veterans sit empty because of staffing problems.
“We’re going to make progress. We’re going to make something happen,†Schatz said.