By Garland Land
Community Services League Board Member
Chair, CSL Advocacy Committee
(Note: This letter was sent to Senator Will Kraus before he resigned his Senate seat to accept an appointment to the State Tax Commission.)
Open Letter to Senator Kraus:
I would like to respond to a recent Capitol Report you sent to your constituents in Lee’s Summit, Blue Springs and Independence. You mentioned that you sponsored Senate Bill 509 which will provide a tax cut to individuals and small businesses. I have several concerns regarding the underlying assumptions behind this change in tax policy.
The first assumption is that if families and businesses pay less in taxes it will spur the economy and create more jobs, which sounds good. However, under this tax policy middle income families would only save about $5 per month in state taxes. This is enough to buy a fast food sandwich. It is hard to imagine that such a small decrease in taxes to individuals and small businesses will create more jobs and have any positive impact on the Missouri economy.
The second assumption of this tax policy is that as the Missouri economy grows and tax collections increase then Missouri could afford further tax decreases without hurting state programs. This assumption may have validity if Missouri already had a sufficient tax floor so essential services are met. However, this is not the case.
This year the Legislature and Governor had to cut several important programs to balance the budget. It is instructive that most of the programs that were cut were serving children, the disabled and the elderly. Some examples of budget cuts and how Missouri is lagging behind the nation include:
This year’s budget funding for State Colleges and Universities is down by 6.6 percent and results in families having to pay more to send their children to college. Also, the Governor had to cut some of allocated money to public schools.
There was a $35 million cut in home and community-based services for the disabled and elderly. Many of the 8,000 people cut from the program are now at risk of having to go to a nursing home. The Rx program for the elderly was eliminated, which effects 64,000 low income senior citizens who cannot afford to pay for life saving medicines.
Our public health measures are some of the worst among the states including having some of the highest maternal and child death rates in the nation.
We are the lowest in the nation in funding our public defender system.
Our highways and bridges are in desperate need of repair which impacts our ability to recruit new businesses in the state
When it is fully implemented, this law will result in more than $600 million in lost revenues to the state every year. This loss will exasperate the state’s ability to fund critical services and will undoubtedly result in more budget cuts to programs helping vulnerable populations. I think most civic minded families would gladly give up the small tax decrease if we could address some of the basic needs in our state.
Many tax changes have resulted in our state’s current severe budget challenges, including your earlier bill that gave multi-state corporations a tax break. While many of these corporations are headquartered in other states, their tax break contributed to a drastic $155 million decline in corporate taxes in the past couple of years.
I understand the corporate tax cut was a result of the concern that Missouri would lose businesses to Kansas when they decreased their taxes. We now know the Kansas experiment failed. The decrease in Kansas taxes resulted in jeopardizing critical services to vulnerable populations. This year the Kansas Legislature voted to restore some of the taxes.
Community Services League provides income supports, employment services, financial coaching and housing counseling. Many of the families we assist are elderly and disabled along with families with children. They need community and government assistance.
We are very supportive of policies that will provide more good paying jobs. CSL has several training programs to help our families achieve financial security. However, we are very concerned, that while tax decreases are well meaning, they will inadvertently hurt the most vulnerable families in our community. Every time there is a budget shortfall the legislative solution is to cut programs serving those most in need.
I hope you will take the leadership in evaluating the real impact of the recent tax decreases.