Nixon won't call special session on income tax cut bill

JEFFERSON CITY, Mo. -- Despite a request from a lawmaker, Missouri Gov. Jay Nixon has no plans to call a special legislative session to craft a new version of an income-tax bill he vetoed, a Nixon spokesman said Wednesday.

Lawmakers are to convene Wednesday to consider whether to override Nixon's veto of a bill that would have phased-in income tax cuts for individuals, business owners and corporations. But the prospects for an override appear to be waning, because several majority-party Republicans have said they are likely to join Democrats in voting "no."

Rep. T.J. Berry, who sponsored the legislation, sent a letter Tuesday to Nixon asking the Democratic governor to call a special session to begin the same time as the veto session. Berry suggested that lawmakers could quickly fix several problems that Nixon had cited and send him a new version of bill within days.

But Nixon doesn't want to rush through a new tax-cut bill, said spokesman Scott Holste.

"The Governor has repeatedly expressed his willingness to work with the General Assembly when they return for their regular session in January on fiscally responsible changes to the tax code," Holste said in an email. "But as the many errors in this legislation demonstrate, trying to throw something together at the last minute is not the responsible approach to an issue as complex and important as tax policy."

The vetoed bill would gradually reduce Missouri's corporate income tax rate to nearly half its current level and cut the top tax rate for individuals from 6 percent to 5.5 percent over the next decade, so long as state revenue continues to rise by at least $100 million annually. It also would phase in a 50 percent tax deduction for business income reported on individual tax returns.

Another section of the vetoed bill would trigger additional reductions in Missouri's income tax rates if the federal government enacts a law making it easier for states to collect taxes on online retail sales.

Nixon has raised concerns the measure could bust a hole in the state budget, jeopardizing funding for education and other public services. He also has objected to provisions imposing state sales taxes on textbooks and prescription drugs, the latter of which stems from an apparent drafting error.

Berry's letter asked Nixon to "give us an opportunity to fix the errors you believe exist sooner rather than later."

"I assure you that, if you call the legislature into extraordinary session, we will have a clean tax cut bill on your desk in a matter of days and at a minimal cost to taxpayers," Berry, R-Kearney, wrote.

Holste said the governor wants any tax cuts to be part of a broader overhaul of the tax code that protects the state's investment in education. He said that should include "comprehensive tax credit reform." Legislators have failed in each of the past several years to agree on bills that would curb tax credits for developers while creating new incentives for particular industries such as international exporters.

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