Tax cut would have 'major impact,' school officials say

School district superintendents and state education organizations say districts could stand to lose $223 million if tax cut legislation is fully implemented, according to a Missouri School Boards' Association news release.

Senate Bill 509, sponsored by State Sen. Will Kraus, R-Lee's Summit, would gradually cut individual state income tax rates from 6 percent to 5.5 percent and phase in a 25 percent deduction on business income earned by individuals. It also would require tax brackets to be adjusted annually for inflation.

Provided by the Missouri Department of Elementary and Secondary Education at the request of MSBA, the data MSBA issued last week compare the estimated funding level for kindergarten through 12th grade education for the fiscal year starting July 1 with the amount of state revenue that would be lost under Senate Bill 509, the release said.

It is estimated the bill would result in at least a $620 million annual revenue loss for the state, the release said.

Proponents of the bill said concerns are exaggerated because the bill contains safeguards: No reduction will go into effect unless the net general revenue collected in the previous fiscal year increases by at least $150 million.

State Rep. Donna Lichtenegger, R-Jackson said in her most recent report to constituents: "You should know that I and other legislators will never allow a bill to affect state revenues in such a way that our elementary and secondary education programs fiscally suffer."

State Rep. Holly Rehder, R-Sikeston made similar comments in her Friday report, stating the current House-approved budget will increase K-12 education funding by as much as $278 million, and funding to the state's public universities and community colleges will increase by as much as 3 percent.

Under the governor's recommendation for fiscal year 2015, Cape Girardeau would receive $9,679,835, according to data from MSBA. With the full cost impact of Senate Bill 509, the district would receive $8,570,643, a $1,109,193 difference, the data said.

Jackson would receive $16,644,579 for fiscal year 2015 under the governor's recommendation. With the full cost impact of Senate Bill 509, it would be $15,344,622, a $1,299,957 difference, the information said.

Cape Girardeau superintendent James Welker and Jackson superintendent Ron Anderson said late last week that the legislation is a concern.

Welker said he was "very disappointed" to hear the state Legislature has chosen to reduce state funding when the school funding formula is not fully funded. Voted into law in 2005 and enacted in 2006-2007, the foundation funding formula was meant to provide equity and adequacy to all Missouri schools.

Welker said the district is working on its budget for next year, which is difficult not knowing what its state allocation will be. The legislation would have a "major impact" in terms of things the district would be able to do and available revenue, he said.

"We would just have to study that and try to figure out what we could do and what we couldn't do," Welker said.

Anderson said the bill looks similar to House Bill 253, passed by the Missouri General Assembly last year and vetoed by Gov. Jay Nixon. As with SB 509, last year's House bill sought to cut income taxes gradually.

Anderson added it could be a "significant issue," because if SB 509 were implemented, the Jackson School District could lose nearly $1.3 million in funding.

Nixon spent last summer traveling the state rallying against HB 253 when a veto override was threatened. Legislators fell just short of the necessary numbers to override the veto after the House and Senate convened in September.

This time, proponents of the Senate bill are hopeful a successful override could achieved if Nixon vetoes SB 509.

Staff writer Samantha Rinehart contributed to this report.

rcampbell@semissourian.com

388-3639