JEFFERSON CITY — Missouri lawmakers could be headed back to the Capitol to act on a call by Gov. Mike Parson to lower the state’s income tax rate.
Parson, a Republican, said he wants to take the rate down to 4.8%. It currently stands at 5.4%.
“Now is the time to give back to hardworking Missourians,” he told reporters Friday.
He said the state budget currently is brimming with surplus revenue as part of a post-pandemic economic surge that has pumped up tax receipts by more than 14% in the past year.
“We want to use that to cut taxes,” Parson said.
A date for a special session of the Legislature has not been chosen. In addition to lowering the tax rate, Parson wants to raise the standard deduction to $16,000 for single filers and $32,000 for joint filers.
That would mean those taxpayers would owe no state income taxes.
The 4.8% rate would put Missouri a few notches below Illinois, which has a 4.95% income tax rate.
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The announcement followed Parson’s decision to veto a proposed tax rebate plan floated by state lawmakers in May. That $500 million proposal would have sent checks worth up to $500 to people making a maximum of $150,000.
Parson said low-income workers and seniors would have been left out of the rebate plan. Plus, because it was prorated, he said the $500 checks likely would have been closer to $100.
Lowering the tax rate was a better approach, Parson said.
“For the taxpayers of this state, this is a win,” he said.
A special session could be problematic in the House, which is under renovation. The chamber floor is stripped down to wood and new carpet is being installed this summer. Desks and chairs are being refurbished and the electronic voting system is being replaced.
House leaders are eyeing an auditorium in the nearby Harry S Truman state office building as an alternative.
“We have managed our state resources responsibly and our consistent investment in workforce development and infrastructure is providing a strong foundation for Missouri. Now is the time to take additional steps to help alleviate the strain on Missouri families. Permanent tax cuts that provide real relief to families, senior citizens, the working class, and small businesses every year is a better answer to the inflationary pressures we face, and we look forward to getting it done,” the governor said.
Parson also wants lawmakers to return to rework a package of tax credits designed to help farmers.
Parson vetoed the plan Friday arguing that the plan sent to him by lawmakers expires after two years, which is not long enough. He wants a six-year plan.
The move, which was expected, affects tax incentives for young farmers, meat packing companies, charcoal producers, ethanol retailers and biodiesel makers.
Parson, who owns a small cattle operation at his Bolivar home, said he is working with lawmakers to resolve their differences.
“I am a farmer. I will never sell farmers or ranchers short,” Parson said. “We can do more and we must be better.”
The various tax credits were worth an estimated $40 million, according to a nonpartisan fiscal analysis.
Farm groups also were pressing for a longer time shelf life for the tax credits.
The legislation is House Bill 1720.
