House Considering Tax Bill that Will Impact State Revenues and Funding for Schools

The House Ways and Means Committee passed HB 1439 late yesterday afternoon.  If enacted, HB 1439 will eliminate our state’s income tax over the course of the next 10 years and will increase other state taxes, including the general sales tax.  The bill poses a significant threat to our state’s future revenues and funding for state services, including public education. 

Speaker Philip Gunn of Clinton is one of three authors of the bill.  When the bill was presented in committee yesterday, House leaders touted HB 1439’s triggers that require revenue growth standards to be met in order for the income tax to be phased out.  MPE Executive Director Kelly Riley is still reviewing the 308-page bill, but it appears as if the first-year tax cuts are automatically implemented effective July 1.  While the bill reduces the tax on groceries, House leaders were not as quick to point out that numerous other taxes will increase if HB 1439 passes.  For example, the state’s current 7% general sales tax will increase to 9.5% effective July 1.  Sales tax on vehicles, cigarettes and alcohol will also increase. 

In a political ploy, Speaker Gunn and House leaders are using public school teachers as political pawns in hopes of increasing support for HB 1439, as language from HB 852 (the House’s teacher pay raise bill) is tacked on to the closing sections of HB 1439. While HB 852 and SB 2001 (the Senate’s pay raise bill) both remain alive as separate bills and either can be passed, the House put a reverse repealer in HB 852 which means that bill has to go to conference. This means the House can let SB 2001 die on the House calendar which will only leave HB 852 and HB 1439 alive with the pay raise language.  It is reprehensible that Speaker Gunn and House leaders would pull the teacher pay raise into the tax cut bill and hold it hostage unless the House leadership gets its way on HB 1439.  To be perfectly clear – the Speaker is using educators to get what he wants. 

HB 1439 is being pushed through at the last minute before the floor deadline for such bills.  Yesterday’s Ways and Means Committee meeting was not livestreamed via the legislative YouTube channel.  Tomorrow is the floor deadline for the bill to be passed by the full House.  While HB 1439 is most likely to be brought up this afternoon when the House convenes at 2:00, it can be held on a motion to reconsider after the vote.  A bill with such significant revenue impact should not be rushed through at the last minute without allowing legislators ample time to review and vet the bill.

HB 1439 threatens state resources for state services.  Lower state revenues result in budget cuts.  Less state funding means local taxing authorities have to either cut services or raise taxes.  States with no income tax have extremely high property taxes. Sales tax increases such as those provided for in HB 1439 hit low-income, elderly and retired citizens harder. Such financial challenges lessen, rather than strengthen, the likelihood of additional funding for our public schools, future teacher pay raises, and other state services. 

As always, MPE encourages you to contact your representative to share your thoughts on HB  1439.  Click here for contact information for those representatives who represent your school district.