Grow Missouri is a broad-based coalition comprised of business, agriculture and grassroots organizations and was formed to advocate policies that will make Missouri a more competitive state. The first issue tackled by our coalition was state income taxes and we witnessed the fruits of our labor in May of 2014, when the State Legislature voted to override Gov. Jay Nixon’s veto of Senate Bill 509. This legislation provided Missouri its first state income tax reduction in nearly 100 years, helping Missouri remain competitive with other states such as neighboring Kansas, Oklahoma and Tennessee that have either cut their state income tax or are taking steps to reform their income tax codes.
Senate Bill 509 reduces the state income tax rate from 6 percent to 5.5 percent for all Missourians making $9,000 a year or more, giving people more discretionary income to recirculate throughout the economy. The historic bill will also help small businesses by creating an individual tax deduction for business income. Once fully phased in, taxpayers will be able to deduct 25% of their business income thus enabling them to reinvest in their businesses and create new jobs.
The legislation is fiscally responsible and carefully crafted to ensure the state does not experience a budget shortfall. To that end, the tax cut provided by Senate Bill 509 will be delayed until 2017, when the governor’s own projections show that the education foundation formula will be fully funded. Furthermore, the tax breaks will not go into effect unless $750 million in additional funding comes into state revenue.
In addition to stimulating economic growth, Senate Bill 509 adjusts the Missouri tax code to reflect modern times. Currently, every Missourian making $9,000 year or more is taxed at the same rate, however, SB 509 indexes income tax rates to inflation and is modeled to help those struggling beneath the poverty line first, giving our most vulnerable population the boost they need to help make it into the middle class.
Throughout the past year, Grow Missouri not only sparked a conversation but ignited a movement to push forth tax reform in Missouri. Along the way, the coalition forged formidable long-term partnerships with the state’s leading pro-business and grassroots advocacy groups and we will support other like-minded coalition partners with complementary pro-growth policy efforts.
While the organization took a moment to savor its first big victory with the passage of Senate Bill 509 during the 2014 legislative session, Grow Missouri remains committed to working with state lawmakers to achieve further tax reform and put Missouri on competitive footing with other states.