JEFFERSON CITY, Mo. — Lawmakers are starting week two of a special session, but what should have been an easy part to accomplish is actually causing some heartburn among members.
Besides lowering the state’s income tax rate, Gov. Mike Parson also wants the General Assembly to reauthorize tax credits for farmers. The legislation was said to be bipartisan, but when the vote came after House leadership cut off debate, many representatives voted “present” instead.
“The purpose of this body is to do things that benefit the people of Missouri at large and that’s not picking winners and losers,” said Rep. Tony Lovasco, R-O’Fallon. “Government works best when government stays out of the way. This is an area where we could stay out of the way and do just fine, yet here we are.”
It’s a bill aimed to helping farmers and rural economic projects, and it’s causing disruption among House Republicans and Democrats.
“It does things like changing who qualifies as a family farm and increases the size,” said Rep. Peter Merideth, D-St. Louis. “Makes me wonder if there are specific companies, maybe even elected officials, that have farms that will now qualify and benefit from this.”
Rep. Brad Pollitt, R-Sedalia, is carrying House Bill 3 for special session. It includes tax credits for farmers and ranchers throughout the state. Parson vetoed nearly the same legislation over the summer because the credits last only two years instead of six.
“I think that it gives the small business, the small farms an opportunity to compete in the area with big farms and big businesses,” Pollitt said on the House floor Wednesday.
The bill includes incentives for meat processing facilities, transportation of agriculture goods and an exemption for certain vehicles from state and local sales and use taxes. It also would create tax credit programs for retailers of higher ethanol blend fuels and biodiesel, in-state biodiesel producers, establishing or improving urban farm operations and creating the Specialty Agricultural Crops Act.
“It’s not as if every farmer would qualify for these things, it’s not as if anyone who’s at all involved in agriculture gets a benefit from this bill,” Lovasco said. “All we end up doing is deciding whose field is going to get the manure and whose gets the water.”
Rep. Don Rone, R-Portageville, has been a farmer for more than 50 years. He told the House chamber the tax credits in the bill are positive.
“Agricultural is one of the few industries that we not only harvest crops, but we are really dependent on our loaning institutions,” Rone said.
Debate was cut off on the bill Wednesday by House leadership, causing many members to double think their vote. House Bill 3 then went to the House Fiscal Review Committee, which had to approve the $40 million sticker price. When it seemed like the committee wasn’t going to have enough votes to pass it, House Speaker Rob Vescovo, R-Arnold, added two Republicans and a Democrat, which was Merideth, to the committee.
“I’ve got to tell you, these process anomalies raise a lot of red flags to me,” Merideth said. “It makes me really hesitate to support a bill if I’m going to find out in a year that it’s going to foreign-owned farms that are benefiting from it or elected officials that are benefiting from it.”
The bill passed out of committee with a 5-2-2 vote with Merideth and Rep. Sara Walsh, R-Ashland, voting no. Rep. Betsy Fogle, D-Springfield, and Rep. Donna Barringer, D-St. Louis, both voted present. When the legislation came back out to the House floor for a final vote Wednesday, some GOP members said they were against it because it favored farmers.
“The reality of it is, this is not some industry that is going to fall a part of not for government’s help,” Lovasco said. “We’re going to have food grown in Missouri with or without this bill. We’re unabashedly favoring a certain industry to get a benefit that other industries don’t get, and even beyond that we are favoring certain companies within that industry.”
House Bill 3 barely passed the House with 83 votes in favor, receiving just one more vote than what’s constitutionally required. There were 24 representatives absent from the vote, 20 that voted present and 28 that voted no.
The Senate passed similar legislation Wednesday morning. The upper chamber had no problem passing their own version with a 26-4 bipartisan vote.
Senators also passed an income tax bill that would lower the state’s rate from 5.3% to 4.95% by 2023. After the rate is reduced to 4.95% in 2023, future reductions would only happen if certain revenue growth is met. Under the legislation, Missouri’s revenue must grow by $175 million in the first year and by 2025, revenue must grow by at least $200 million to lower the income tax rate. When fully implemented, Missouri’s income tax rate would be 4.5%.
The upper chamber’s version would cost the state nearly $1 billion, roughly $300 million more than what the governor asked for when he wanted lawmakers to lower the rate immediately down to 4.8%. Special session work will continue this week as House members return to Jefferson City to work on tax cut bills. The Senate will resume its work next Monday.