May 1 Missouri Governor Jay Nixon announced on
Thursday he will veto a bill that would lower the state's income
tax rates, calling it "unaffordable, unfair and dangerous."
The Republican-controlled legislature sent the bill, which
gradually reduces the state's maximum personal income tax rate,
to Nixon on April 16.
The bill prohibits a rate reduction if the state's net
general revenues have not grown by at least $150 million. It
also would create and phase in a 25 percent individual income
tax deduction for business income.
But the Democratic governor said the measure would decrease
Missouri revenue by more than $620 million a year when fully
implemented and lead to funding cuts.
"This fiscally irresponsible legislation would permanently
undermine support for education and the vital public services
that strengthen our economy and support our quality of life, and
it cannot become law," Nixon said in a statement.
Earlier on Thursday, he raised the possibility that Missouri
could lose its triple-A credit rating if the bill were to become
Late on Wednesday, Moody's Investors Service downgraded
Kansas by a notch to Aa2 from Aa1, citing in part budget
pressures from the state's phased-in income tax cuts and rising
public pension costs.
"In their rush to follow Kansas down the fiscally
irresponsible path of eliminating 'pass-through' income for
businesses, the General Assembly seems determined to put
Missouri's spotless AAA credit rating at risk," Nixon said.
(Reporting by Karen Pierog, editing by G Crosse)