Representative Jim Neely's Capitol Report
Greetings, friends of the 8th District!
House to Begin Work on State Operating Budget
After months of work by the House Budget Committee, the Fiscal Year 2019 state operating budget is now ready for discussion and debate on the House floor. When lawmakers return from their annual break on March 26, the budget will be their top legislative priority. House members will work to approve the appropriations bills that make up the spending plan and send them to the Senate so that both chambers are on track to complete the budget by the May 11 deadline.
Next week when House members offer amendments to the budget plan, it’s important to note that such changes must remain revenue positive or revenue neutral. If a member wants to add money to a specific area of the budget, he or she must first find another area of the budget from which the funds can be transferred. There is no way to simply add funding to a particular program without first cutting it from somewhere else in the budget. This process ensures the budget remains in balance.
As the budget comes to the House floor, it has several noteworthy items in its current state, including:
· Full funding for the K-12 school foundation formula, which is $98 million above the Fiscal Year 2018 appropriation. The House version of the budget recommends an additional $48 million increase above the governor’s recommended increase of $50 million for Missouri schools. The funding increase also includes state dollars for preschool programs for children eligible for free and reduced lunch statewide.
· Restoration of the governor’s recommended core cuts to the state’s higher education institutions. The House version of the budget will restore at least $38 million of the governor’s proposed cuts, and will restore all funding if institutions agree to prevent tuition increases for Missouri students. If no deal is made, funding would be used to increase need-based scholarships.
· Restoration of half of the funding cuts made to Medicaid providers in the FY18 budget (including hospitals, nursing homes, physicians, and in-home providers).
· An additional $2 million for the expansion of the workforce development program through the state’s community colleges.
· Restoration of more than $400,000 in cuts that were made to the Missouri National Guard.
House to Consider Comprehensive Tax Reform (HB 2540)
When they return from break, House members are also expected to take up comprehensive tax reform legislation that would cut the state’s personal and corporate income tax rates and transform Missouri’s tax system to the most competitive in the nation. The legislation would also make substantive reforms that would generate nearly $2 billion over the next 10 years for the state road fund to repair and improve Missouri’s aging transportation infrastructure.
The bill House members will consider would reduce the state’s highest personal income tax rate from 5.9 percent to 5.0 percent, which would place Missouri in the top 10 states for lowest personal income tax. The bill would also cut the corporate income tax from 6.25 percent to 5.0 percent. These reductions would also put Missouri in the top 10 states for the lowest corporate income tax.
The bill would also generate much-needed revenues for the state’s roads and bridges. It would put Missouri in line with many other states by indexing vehicle user fees to the cost of inflation. The state’s current vehicle license and registration fees were put in statute in 1984, and have not changed in more than 30 years. The tax reform bill would update fees from their 1984 value to present day value. The increase is a key component to the effort to generate more than $2 billion in additional funding for transportation infrastructure over the next decade.
The legislature has spent years studying and discussing ways to find the dollars necessary to repair and improve the state’s transportation infrastructure. The bill the House will consider is meant to provide a responsible path forward to generate the vital funding. The idea was recommended by both the 21st Century Missouri Transportation System Task Force and the House Policy Development Caucus.
Additionally, to maintain financial stability to the state tax code, the bill would make a number of other reforms including:
· Joining the Streamlined Sales Tax agreement so that Missouri collects sales taxes on online purchases placing Missouri brick and mortar businesses on equal footing with online competitors;
· Phasing out the federal income tax deduction on state returns for individuals and corporations with over $150,000 in income;
· Reducing waste in state government by consolidating maintenance between certain government agencies;
· Eliminating deductions and closing loopholes; and
· Implementing other necessary reforms that would eliminate government inefficiencies.
The reforms are critical components to keep the bill fiscally responsible and as close to revenue neutral as possible.
Looking Forward
As my fellow legislators and I return from Spring Break, I look forward to continuing to work on issues that are important to the citizens of the 8th District and the rest of our great state. These will include the budget and tax reform. There are also several other bills, including some of my own, that will be moving into the Missouri Senate from the House and vice versa.
Thanks to your support, the first half of this year’s legislative session was a success. Many priorities still need to be addressed in the remainder of the session, but I expect great results. As we approach this last half of the 2018 legislative session, I hope you will contact my office with any concerns or feedback you may have on legislative or other issues.
Thank you for your continued support!
Yours in service,
Representative Jim Neely
Proudly Serving the 8th House District
Clinton, Caldwell, Ray, & Clay Counties
Missouri House of Representatives
573-751-0246
