Missouri House fails to override veto of income tax cut - WSFA.com: News Weather and Sports for Montgomery, AL.

Missouri House fails to override veto of income tax cut

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A Republican push to cut Missouri's income taxes failed Wednesday when the state House fell significantly short of the two-thirds majority needed to override a veto by Gov. Jay Nixon. (Justin Schmidt/KCTV5) A Republican push to cut Missouri's income taxes failed Wednesday when the state House fell significantly short of the two-thirds majority needed to override a veto by Gov. Jay Nixon. (Justin Schmidt/KCTV5)
JEFFERSON CITY, MO (KCTV/AP) -

A Republican push to cut Missouri's income taxes failed Wednesday when the state House fell significantly short of the two-thirds majority needed to override a veto by Gov. Jay Nixon.

The vote marked a major victory for the Democratic governor, who had warned that the tax cut could jeopardize funding for public education, mental health care and other state services.

The House voted 94-67 to override Nixon's veto. But that fell significantly short of the 109 votes needed for a two-thirds majority. As a result, the override never was considered by the Senate.

The tax cut bill was one of the most high-profile issues among Nixon's 33 vetoes this year.

Republican legislative leaders had touted the tax cut as an important means of spurring the economy and competing for businesses against Kansas, Oklahoma and other states that recently cut income taxes. The GOP holds 109 House seats — the exact amount needed for a veto override. But rank-and-file Republicans were not united on the bill.

And groups had targeted key Republicans.

The legislation would have gradually reduced Missouri's corporate income tax rate from 6.25 percent to 3.25 percent and its top tax rate for individuals from 6 percent to 5.5 percent over the next decade, so long as state revenues continued to rise by at least $100 million annually. It also contained a five-year phase-in for a new 50 percent tax deduction for business income reported on individual tax returns.

Another part of the bill would have triggered an additional Missouri income tax cut if the federal government enacted a law making it easier for states to collect taxes on online retail sales.

In addition to raising concerns about the hit to the state budget, Nixon also opposed the bill because it contained an apparent drafting error that would have imposed state sales taxes on prescription drugs.

Dave Myers of Grow Missouri said he was disappointed in the vote.

"They voted against job growth today," he said. "We don't have enough jobs. Encouraging small business is the only way to grow jobs. It didn't happen. . . The bottom line is legislators made the wrong decision today. We need job growth, business growth. We are losing it to surrounding states."

Kevin McManus, a Democrat from Kansas City, said the bill had too many problems, and legislators made the right decision.

"There's a lot at stake. What we are talking about is the future of our state and the direction we want to prioritize. Do we want to prioritize funding education, continue to have safe roads and services for seniors or the disabled? This bill could have dramatically reduced revenue up to a billion dollars by some estimates."

He said the issue of competing with other states needs to be explored next year while maintaining good public schools.

"There were some serious problems, unintended consequences, tax increases. This is the right move for this bill," he said. "No doubt we'll be back to the drawing board in January."

Nixon issued the following statement, "Missourians are fiscally conservative folks who want good jobs in their communities and quality schools for their kids. Over the past several months they have fought to defend those bedrock principles from being undermined by a reckless experiment -- and today, they won. I applaud the legislators from both parties who came together to sustain my veto of this fiscally irresponsible bill, which would have defunded our schools and weakened our economy. Today's vote represents a defining moment for our state and a victory for all Missourians."

Copyright 2013 KCTV (Meredith Corp.) and the Associated Press. All rights reserved.

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