Thursday, October 12, 2017
Galloway on Incentives and Exemptions
Yesterday Auditor Nicole Galloway released an audit of Cost of Tax Incentives and Exemptions. See it here.
The press release: The review included hundreds of tax breaks intended to spur economic activity in the state, but found the legislature lacks an accurate way to account for or track their fiscal impact…
The report looked at a 2015 law that created a new method of allocating corporate income from interstate sales between states. The bill's fiscal note estimated the legislation would have a cost of $15.2 million each year. However, in the first two years since the law was implemented, corporate income tax collections have decreased by $177 million…
The audit also reviewed the discount offered to retailers in exchange for paying sales taxes on time. Missouri's discount is the second highest in the nation. A similar discount is offered to businesses that remit their employee withholding taxes on time, which is a discount only offered in Missouri. Over a two year period, these two discounts account for up to $282 million…
Missouri has 209 sales tax exemptions for items like commercial laundries, fitness classes, and medical equipment. However, the Department of Revenue only tracks the specific impact of three individual exemptions….
Q&A #1: Is Tax Reform Possible in Missouri?
Short answer: Yes. But it will require some strategic planning and tactical finesse.
Galloway’s audit is important. As a Democratic statewide office-holder she’s coming to some of the same conclusions that the new Republican administration is testing out. This has the potential to build a broad coalition to tackle an issue which is inherently resistance to change.
Galloway’s audit raises the issue that Missouri’s hundreds of sales tax exemptions are a half-haphazard hodge-podge which can’t be defended as an efficient way to promote economic growth. This is the sames type of talk that Department of Revenue director Joel Walters has been saying in interviews.
Similarly Galloway criticizes the “giveaway” discount that companies received for paying their taxes on-time. This was also highlighted in the governor’s draft report to simply and lower taxes.
The problem with tax reform is that when you close loop-holes and end exemptions to lower the overall tax rate, you have losers. Those "losers" have lobbyists and spheres of influence. And it’s a lot easier to kill something in Jefferson City, than change something.
So tax reform needs a long-term plan. Don’t try to do it all at once. And it needs a beefed up focus from the second floor – more folks running traps in Jeff City, fewer folks thinking Iowa 2020.
Eyes on SBOE
It’s been a few weeks since drama consumed the State Board of Education. At the time there was an aborted appointment amid rumors that the Greitens administration was set on ousting of DESE Commissioner, Dr. Margie Vandeven.
Word is that the governor remains interested in a leadership change. With the next board meeting fast coming (it’s at the end of the month), we’ll see if Team Greitens can muster working majority on the board to accomplish its goal.
Onder Leadership PAC Deposits $100K
In the large contributions (below) the Missouri Senate Leadership PAC – a PAC associated with Assistant Floor Leader Bob Onder – received a $100,000 check from MCO Investments. It has the same address as Onder Law Firm. That’s Sen. Onder’s brother’s law firm, which as the website (and contribution) shows, is a successful trial attorney firm. Will the six-figure check make Rs skittish about Onder’s commitment to their never-ending quest to tighten the vises on tort attorneys?
Follow-Up on Mizzou Lobbying
One consequence of the University of Missouri’s bungled process to hire a new government relations executive may be a dearth of quality candidates. As one lobbyist sums up: What a cluster at Mizzou. Do they think re-booting the selection process will bring better candidates? Why apply, put yourself out there, and know it could be thrown out at the last second because the curators couldn’t make a decision.
Shall-Will Part II
The ridiculousness continues unabated… I wrote at the beginning of the month of the superficial effort across state departments to reduce the regulatory burden.
Every agency shall answer: How many restrictive terms are in each rule? Includes words such as “shall,” “must,” “may not,” “prohibited,” and “required.” Notice that “shall” is included in the list of “restrictive” terms they’re trying to reduce. So what happens? “Shall” is being deleted in proposed rule-changes and replaced with the word “will” and other such words that don’t seem to change anything about the regulations.
It looks like the exercise in window-dressing is still going on. See just some of the new proposed regulatory “reforms” here and here.
Show Me the Jobs?
Governor Eric Greitens’ announcement of new National Guard jobs coming to Missouri brought this response from a Republican denizen of the building…. “We pass the entire Chamber of Commerce dream list this past session and the biggest job announcement Greitens has to date is 800 new government jobs….”
MOScout Reprise
As we’re in the stage of the budget process where the governor’s office is looking at department recommendations and building their 2019 blueprint I figured it’s worth “reprinting” this blurb from 2013 MOScout. The year-to-year issues may change, but the overall advice is sound…
One lobbyist suggested to me that all the drama around First Steps funding this year distracted from an essential truth which held this budget year and every budget year: the second floor dominates the process. The governor’s initial budget proposal is usually 95% what the final budget ends up. There are always high-profile clashes – a chef in the mansion etc – which do little to change the real impact of the budget. If you want to serve your clients, work the budget early in the process with the governor’s office.
And
Minor budget action earlier this week. See it here.
Tweet of the Day
Lieutenant Governor Mike Parson crushing cars. See it here.
Bits
Congressman Emanuel Cleaver not ready to vote for impeaching Trump. Not yet. See it here.
Governor Eric Greitens has appointed Lynne R. Perkins, of St. Louis, as Associate Circuit Court Judge for the 22nd Judicial Circuit, which covers the City of St. Louis. He will replace Judge Theresa Counts Burke, whom Governor Greitens appointed as Circuit Court Judge earlier this year.
Now missing from the Senate website’s staff listing… Ryan Nonnemaker and communications director Anne Marie Moy who left to become the Department of Revenue’s new Director of Strategy and Communications.
Rep. Paul Curtman talks to the St. Louis Young Republicans tonight… 7:00PM at The Lodge in Des Peres.
Today’s Events
Powered by Mary Scruggs’ indispensable calendar:
Sen. Doug Libla Golf – Ozark Ridge Golf Course – Poplar Bluff – 11:30AM.
Lobbyists Registration Changes
Rodney Boyd, Katherine Casas, Brian Grace, and Kelvin Simmons added Deloitte Consulting LLP.
Kyna Iman deleted American Red Cross – Missouri Chapter.
$5K+ Contributions
KC Transportation Transit and Tourism Committee (KC3T) - $25,000 from Kansas City Southern.
Missouri Republican Leadership PAC - $10,000 from Missouri State Council of Fire Fighters PAC.
KC Transportation Transit and Tourism Committee (KC3T) - $15,000 from McCownGordon Construction LLC.
New Approach - $50,000 from New Approach PAC.
Missouri Senate Leadership PAC - $100,000 from MCO Investments LLC.
Birthdays
Happy birthdays to Reps. Jason Chipman and Rick Francis, former Rep. Charles Schlottach, David Chilenski, and Jeff Mazur.