Nixon: Kansas Credit Downgrade A Warning To MO

By Matt Lupoli |

Published 05/05 2014 09:39PM

Updated 05/06 2014 04:49AM

SPRINGFIELD, Mo. -- As Missouri lawmakers made moves to override Gov. Jay Nixon's veto of tax cut SB 509 Monday, he spoke in Springfield about why he thinks the bill could hurt the state's credit rating.

State senators voted to approve the override. The House will decide what to do next, and a vote there is expected Tuesday.

"The bottom line is that our conservative fiscal plan focuses on education and workforce training, and 509 will put that at risk," Nixon told KOLR 10.

Nixon spoke at Springfield's Commerce Bank, saying he thinks the tax cut could hurt Missouri's AAA credit rating. He said a just-imposed downgrade to the credit rating for Kansas after similar legislation passed there should serve as a warning to Show-Me lawmakers.

"With this much at stake, our credit rating must be protected and my veto must be sustained," Nixon said. "If it (the interest rate) ticks up because of this tax bill that mimicked what happened in Kansas, then interest rates go up three-tenths of a point and in a town like Springfield, with Springfield school districts and the amount of debt they have, that would be about $10.7 million more in the future that the taxpayers would have to pay to get the same amount of stuff."

Republicans say Nixon's concerns are misleading and that the cut would provide tax relief to all Missourians, and put more money back in the state economy without hurting funds.

The broad tax cut bill, SB 509, would cut the max rate by a half percent and allow for a 25 percent business deduction in 2017, if the state's revenue increases by $150 million over the past three years.

Nixon calls it a risky experiment.

"When they do things like this -- that delay the implementation, so that the people voting on this bill won't have to live with the consequences of it because of term limits -- that should concern everybody," Nixon said. "They modeled this bill over what Kansas did, and Kansas was just dramatically downgraded."

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