MOScout Daily Update: Revenues Turn Negative - Mailers Ding Reps on Tax Vote - Senate Changes Ed Funding - Freedom Caucus Rattles Saber and more…
Revenues Turn Negative
Yesterday’s daily revenue report – from the close of business Monday – showed the state’s fiscal-year-to-date revenue had turned negative. These numbers can be volatile, so this may be a short-lived phenomenon. But it’s also an indication of the general weakness in tax receipts. The consensus revenue forecast expects a 2.1% decline by the end of the fiscal year this summer.
Why It Matters
Some will see this as a fitting omen as the legislature pounds out the details of next year’s budget, and as the Senate takes up debate on Governor Mike Kehoe’s tax plan.
Income Tax Debate in Senate
It’s April 15, Tax Day, and so the Missouri Senate is expected to debate the plan to eliminate the state income tax.
Supporters say this is “a responsible, revenue-triggered timeline that only moves when the state can afford it… Cuts begin only when net general revenue exceeds the FY2025 baseline by $20M. Never faster than revenue grows.”
· Seniors who pay income tax get a direct cut... This is how Missouri becomes a state where their kids and grandkids stay.
· School funding protection is written into the constitutional amendment.
· The governor has promised that agriculture, health care, and real estate will be protected.
· Local governments must cut at least one local tax dollar-for-dollar. This is property tax relief too.
But there are real issues…
· What happens to the governor’s promise of carveout when there’s a new governor?
· Is it a tax cut with concerns about funding services? Or is it just a tax shift with winners and losers?
· Common sense says that taxing spending rather than earning will hit poor folks harder, who must spend every dollar they earn just to get by. Rich people, by contrast, are net savers. They don’t spend every dollar they earn.
Tax Fight Coming to a Primary Near You
The Republican Accountability Project is sending mail into Republican primaries in Senate 6 and Senate 18. They’re dinging Reps. Rudy Veit and Greg Sharpe for voting against HJR 174, while boosting rivals Jake Vogel and Rep. Ed Lewis.
· See the mailers here: Senate 6, Senate 18.
It’s Also April Fundraising Filing Day
Reports are due by 5PM today. I hope to have a full rundown for you tomorrow.
Meanwhile, one whisperer says that St. Louis County Assessor Jake Zimmerman will report $800,000 in his campaign committee. That’d be a big number that pulls him into the ballpark of Sen. Brian Williams.
· Williams’ cash on-hand between his various committees last quarter was around $900,000.
Senate Markup
Here are some of the biggest changes from yesterday’s markup in Senate Appropriations…
· Foundation Formula. Senate Appropriations Chair Rusty Black offered an alternative to the House’s foundation-formula position. The Senate used about $120 million from the Missouri State Capital Commission Capital Preservation Fund and reworked the House’s mix of lottery/classroom-trust/state-school-moneys funding to shore up school payments.
· Higher Ed. The Senate reverted to the governor’s position from the House, retaining the status quo. Black said that move was “virtually unanimous” among senators he had spoken with.
· Child care. The Senate repeatedly chose governor positions over House positions on major subsidy lines.
· Transportation. The Senate rejected some local projects from the House budget, while adding a big line item of its own: $50 million for low-volume roads. That came from the Capital Commission Fund.
· Medicaid / MoHealthNet. The Senate used FRA money to raise the outpatient fee schedule.
Meanwhile
The Freedom Caucus shakes a saber. They say, on a Twitter post, that they want to see a year-over-year reduction in spending.
It’s unclear if this is aspirational, or a red line beyond which they will not vote for the budget. The Senate contingent of the Freedom Caucus is much diminished. It’s just Sens. Nick Schroer and Adam Schnelting. However, there are FC-aligned senators who might get on board with an effort to rein in spending. And depending on whether Dems play along, some budget votes could be tight.
Follow-Up on DOR’s FUSION
One reader pointed me to this recent article in the KCStar…
· The Department of Revenue installed its new computer system, FUSION, or Fifty Unique Systems in One Nexus, in the fall of 2024. But a year later, those attorneys began noticing that clients who had received suspended imposition of sentences in courtrooms for traffic charges such as driving while intoxicated were receiving notices that their licenses would need to be revoked for a conviction.
· Suspended sentences or SIS, in Missouri, are not treated as convictions, but changes in the computer system have resulted in these cases being recorded as convictions in other states, attorneys say.
· Officials at the Department of Revenue said in a statement that they are working on a fix. “The DOR driver licensing system has always shown all court actions that affect driver licensing, including SIS,” said JoDonn Chaney, a Department of Revenue spokesperson. “The FUSION system - phase 1, that was implemented on November 12, 2024, classified SIS recipients in the same way but also indicated the court’s actions on printed documents. Beginning next week – printed records will no longer display the SIS status.”
Sieren Promoted
Madeline Sieren is now Senator Josh Hawley’s Communications Director. She had previously been Hawley’s Deputy Communication Director. Before that she worked for Andrew Bailey in the AG’s office.
$5K+ Contributions
Yes for Prop RP 2026 - $5,026 from Incite Design Studio.
Citizens for Jason Johnson - $25,000 from Brent Davis.
Best Start for Kids STL - $50,000 from Alison Ferring.
Better Days PAC (pro-Rita Days) - $10,000 from Laborers' International Union of St. LouisNA Local No. 42 PAC Fund.
Respect MO Voters Campaign - $100,000 from Unite. Inspire. Lead.
Stop the Ban - $25,000 from American Civil Liberties Union of Missouri.
Lobbyist Registrations
Heath Clarkston, Doug Nelson, Michael Henderson, and Sherry Doctorian added Johnson Controls Inc, and Truehold.
Andrew Carty added Aypa Power Development LLC.
Happy Birthday
Happy birthdays to David Wood, Leonard Hughes, and Scott Muschany.