Jackson County would suffer a significant loss of revenue and notable cuts to service if some sales tax cuts are allowed to stand, County Executive Mike Sanders said Monday.
“You’re looking at a massive reduction in service,” Sanders said. That could include putting jail inmates back on the streets, he said.
The office of Gov. Jay Nixon estimates local governments around the state would lose $351.2 million a year if the cuts go through. The exemptions from state and local sales taxes include 10-year-old vehicles, admission to amusement parks and professional sports, farmers markets, certain types of food processing, data storage, and others.
The General Assembly passed them on the last day of its session in May, and Nixon has vetoed 10 of those bills. Legislators meet Sept. 10 to consider overriding the governor’s vetoes, and Republicans have veto-proof majorities in both houses of the General Assembly.
“One hopes that common sense would prevail, but it’s a very fluid situation,” Sanders said. He said he has been talking to area legislators about the impact on local government.
The tax-exemption that he’s most concerned about is for data centers. Bringing more data centers to the area has been a priority for economic development officials for some time, but the governor and others say the bill that was passed goes far beyond what’s been discussed all along, defining virtually any business with a computer as a “data center.”
“Virtually anyone could make a ... case that they’re a data-processing center,” Sanders said.
“It’s impossible to tell. It’s so broadly construed,” he said, but he said it could mean a 10 to 15 percent hit to county tax revenues.
If Nixon’s veto of the data-center bill is overridden and the tax cut goes into effect, it would be a “game changer and potentially catastrophic” for the county.
For instance, he said the county could be forced to close one floor of the county jail, putting 180 of its 800 inmates on the streets.
“It’s hard to overstate the impact on public safety,” Sanders said.
Nixon’s office has outlined its estimates of the impact to local governments if all 10 bills go into effect: $12.87 million for Jackson County, $1.86 million for Blue Springs, $221,575 for Grain Valley, $455,881 for the Central Jackson County Fire Protection District; $5.01 million for Independence and $689,404 for the Independence Events Center Community Improvement District.
Sanders said it’s his sense that legislators didn’t set out to do harm but that things went awry. He suggested introducing a bill early in the session, a full discussion and a vote.
“These ought to be data-driven decisions, not time-driven decisions,” he said.