MOScout Daily Update: Businesses Wary of Income Tax Plan - The End of Truman and Harris-Stowe? - Rayner for Fitz - Gosselin PAC and more…
AIM Opposes Kehoe Plan
Associated Industries of Missouri asked legislators to oppose Governor Mike Kehoe’s income-tax phaseout plan “as currently drafted.” See the legislative alert here.
What AIM wants to see…
· Allow pass-through entities such as S Corps, LLCs, LLPs, partnerships, sole proprietors, etc., to enjoy the income tax reduction and elimination;
· Do not apply sales/use taxes to inputs of any business producing goods and services that are subject to sales/use taxes;
· Besides expanding the tax to digital transactions and services, protect the specific sales tax exemptions in current law, particularly those that would result in double taxation if they were eliminated;
· Prohibit new gross receipts and other new types of taxes (taxes on profits, hybrid gross receipts/income taxes on businesses, etc.);
· Cap the corporation income tax rate at the current rate of 4%; and,
· Suggest proponents consider stating a maximum sales/use tax rate increase in the proposal because businesses, as well as individual consumers, pay sales and use taxes.
Business interests are worried that the income tax phase-out could shift the tax burden to businesses…
HJR 173 & 174 will likely be debated on the House floor today.
Budget Markup Begins
The House Budget Committee began it markup process of the budget. Two topics dominated…
· Childcare. Budget Chair Dirk Deaton rolled out a $50 million cut to childcare “enhancements,” as well as reverting to the status quo of paying based on childcare attendance, rather than childcare enrollment. Ranking Minority Member Betsy Fogle called up Budget Director Dan Haug to reiterate that the governor’s office was sticking by its promise to pay according to enrollment. Enrollment payments are higher and give providers greater revenue certainty. Fogle promised this was an issue she would “dig in on.”
· Higher Education Funding. As I wrote over the weekend, the new plan would replace the current funding model with a simple FTE (Full-Time Equivalent) credit-hour based calculation so that the funding “follows the student.” The more students enrolled, the more money an institution gets. Some members – notably Reps. Louis Riggs, John Black and Scott Cupps – praised the plan. But there was clear bipartisan heartburn. Even those who saw benefits in the change thought that the move was too abrupt and needed to be phased in. Some openly worried that the change would mean the closure of Truman University and Harris-Stowe University.
Driving the Day: SCOMO Hears Redistricting Case
At 9AM, the Missouri Supreme Court is scheduled to hear oral arguments in Merrie Suzanne Luther, et al. v. Denny Hoskins and Missouri. The question before the Court is whether the state constitution limits congressional redistricting to once a decade.
· According to a press advisory from opponents of the new map, “hundreds of Missourians will gather outside the Missouri Supreme Court, as they hear Luther v Hoskins case, to demand fair congressional maps.”
Roberts Calls Schroer Claim ‘Patently False’
Yesterday, Sen. Steven Roberts offered an amendment to the Senate Journal to reflect how the Senate perfected SB 888 in his absence.
“By the time the Senate substitute for SB 888 was brought back before the body on March 4, 2026, Senator Roberts had been called to active duty to serve his country and was therefore absent with leave. Even though Senator Roberts was due to return on Monday, March 9th, Senate leadership denied requests from Senator Roberts and his colleagues to postpone consideration of SB 888 until Monday… when the Senate substitute for SB 888 was brought back before the body, the bill sponsor withdrew the Senate substitute, and with it, withdrew Senator Roberts' amendment from consideration, thereby silencing the Senator while he was serving our nation. Senate leadership further denied Senator Roberts the opportunity to participate in negotiations, insisting the Senate would not adjourn until a new substitute for SB 888 was perfected, which the Senate did after 3:30 a.m. on Thursday, March 5th, after the bill sponsor inaccurately claimed, during an inquiry with Senator Hough, that Senator Roberts' interests were indeed reflected in SS No. 3 for SB 888, a patently false claim.”
· The amendment failed. Republican Sens. Mike Cierpiot, Lincoln Hough, and Mike Moon voted with Dems in favor of the amendment.
Utilities Unveils Big Solar Bill
Yesterday House Utilities Chairman Bob Bromley convened his committee to work on potential wide-ranging statewide solar regulation. “The people who are building solar, they need clarity. The people in the counties, they need clarity.”
The vehicle is Rep. Brad Banderman’s HB 2762. Banderman walked through the provisions and took committee feedback. Here are general contours of the framework…
· Commercial solar facilities would be taxed $3,000 per megawatt of nameplate capacity, increasing 2% annually.
· Solar projects must be 500 feet from occupied dwellings, reduced to 300 feet if screened by fencing or vegetation.
· Solar developers must register with the state and post a bond covering the cost of removing the project and restoring the land.
Arnold: We’ll Be Back
Missouri Independent reports on the prospects for the VLT bill, now that it’s on the Senate side. What caught my attention was the closing of the article… [J & J Ventures lobbyist Andy] Arnold said he’s playing for long-term gains. If casino opposition ceased, Arnold said, a deal could be made this year. “If they continue to say no, OK,” Arnold said. “We’ll be back next year, and the Senate will be entirely different, because there’s 11 seats up.”
What It Means
This raises the prospects that proponents and opponents of the VLT bill will play in this year’s Senate primary and general elections. I wouldn’t be surprised if we see big checks coming into candidates’ PACs depending on where they stand on legalizing/outlawing/regulating VLTs.
Money Watch
· Missourians for a Responsible Budget received $150,000 from MCR PAC. MO for Responsible Budget is the pro-Scott Fitzpatrick PAC. He’s running for re-election this year. MCR PAC is Mike Rayner’s PAC.
· Rep. Tricia Byrnes, running to succeed Sen. Travis Fitzwater, anted $65,000 into her campaign committee.
PAC to Support Gosselin
Missouri Families First PAC was formed. It’s in support of Russ Gosselin. He’s the Republican running in House 132 against incumbent Democratic Rep. Jeremy Dean. This should be a safe seat for Dems, but they’re nervous (and Republicans are hopeful) because Dean sending an obscene text to a colleague gives Gosselin an easy line of attack.
Other PACs
· Stand for Truth PAC was formed. It’s in support of Ellen Nichols who’s taking on Sen. Jill Carter in Senate 32.
· Truth Trust & Transparency PAC was formed. It’s in support of Bob Dixon, the former state senator who is now Presiding Commissioner of Greene County.
Diehl Gets 21 Months
St. Louis Business Journal reports that “former Missouri House Speaker John Diehl was sentenced Monday to 21 months in federal prison for defrauding a Covid‑19 relief program, capping a case in which prosecutors said he improperly spent nearly $380,000 in disaster aid on personal expenses including luxury car payments, country club fees and a retirement plan.”
The United States Attorney’s Office notes that this wasn’t Diehl’s first act of fraud. “In 2023, Diehl entered into a consent order with the Missouri Ethics Commission after improperly using $6,762.70 of campaign committee funds to pay for personal expenses unrelated to any political campaign and failing to report additional expenditures of campaign committee funds, including at least $28,700 of personal expenses. Diehl was fined $47,392.”
· Diehl is the third House speaker to go to jail. Bob Griffin pleaded guilty to bribery and mail fraud; Richard Rabbitt was found guilty of mail fraud and extortion.
Onder for Brattin
Press release: Congressman Bob Onder today announced that he is endorsing Rick Brattin for Missouri’s 5th Congressional District. “No one is better prepared to represent central Missouri and the new 5th District than Rick Brattin. I know that he is a true conservative we can trust to stand up for us, as Rick and I worked hand-in-hand on numerous conservative priorities in the Missouri Senate, including protecting children from sex change procedures, removing pornographic books from Missouri schools, and lowering the tax burden for Missouri families and small businesses,” said Onder.
New Candidate Filing
· House 65 – Dale Conoyer (D)
· House 152 – Corretta Bishop (D)
· House 162 – Roger Koch (R)
$5K+ Contributions
Friends for Tricia Byrnes - $65,000 from Tricia Byrnes.
Stop the Ban - $100,000 from American Civil Liberties Union Foundation, Inc. (New York, NY).
Stand for Truth PAC - $20,000 from Freeman Physicians Group PAC.
Pfizer Missouri Political Action Committee - Federal Committee - $12,000 from Pfizer Inc. PAC (New York, NY).
Quad County Emergency Services PAC- $7,972 from Professional Firefighters of Wentzville.
Quad County Emergency Services PAC - $6,479 from Central County Professional Firefighters.
Quad County Emergency Services PAC - $8,660 from Cottleville Professional Firefighters Association.
Quad County Emergency Services PAC - $8,660 from Pattonville Professional Firefighters.
Lobbyist Registrations
Nexus Group added LCD Acquisitions, LLC.
Abby Dickinson and Tyler Travers added Missouri Solar Energy Industries Association (MOSEIA).
Cameron Sholty added Heartland Impact.
Heath Clarkston, Doug Nelson, and Michael Henderson deleted KC Fiber, and Carfax, Inc.
Happy Birthday
Happy birthdays to Jamey Murphy, Eddy Justice, Andew Arnold, and Luke Scavuzzo.