JEFFERSON CITY — Many low-income and elderly Missourians may not qualify for a proposed tax rebate being considered by state lawmakers.
And with just a month left in the Legislature’s annual session, the clock is ticking on officials to figure out how to get the most benefit out of a record amount of surplus funds sitting in the state treasury.
At issue is a hastily crafted plan in the House to send $500 checks to Missouri taxpayers using at least $1 billion that is not being spent in the upcoming state budget.
The rebate, sponsored by Rep. Cody Smith, R-Carthage, would be based on a tax filer’s total annual income tax bill for 2021. If someone owes the state $500 or more, they would receive the full credit. If someone owes $15, they would receive a $15 check.
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In general terms, anyone making under $12,900, or a couple making under $26,000, would likely not qualify for the rebate because their tax liability is likely zero.
Jay Hardenbrook, advocacy director for AARP Missouri, said many seniors have low-enough incomes that they don’t owe income taxes.
“But they still pay sales taxes, they still pay property taxes and they still pay gas taxes, all of which take a big bite of your budget when you have limited income,” Hardenbrook told members of the House Budget Committee.
The Missouri Budget Project, which tracks the state’s revenue and expenses, said it estimates at least 400,000 Missouri households would not qualify because their pay is too low.
“Missourians whose pay is so low that they don’t owe income tax are still paying taxes,” said Amy Blouin, president of the organization. “In fact, the lower your earnings, the more you pay in state and local taxes as a share of what you make.”
Republicans said there are other programs offered by the state that can help low-income Missourians.
“I believe this is meant to help our middle class. Those people are in need of relief,” said Rep. Richard West, R-Wentzville.
In addition to the concerns about who would qualify, the Missouri Department of Revenue cautioned lawmakers that it has not had enough time to analyze the proposal and would likely need additional funds to process the checks.
“It would be a huge administrative hurdle,” said Zach Wyatt, legislative director for the agency.
Wyatt also said the department has not had time to determine what the average check would be and was unsure when the agency would be ready to provide more details.
“It’s hard for me to put a time frame (on it),” Wyatt said.
Smith, who chairs the House budget panel, urged lawmakers to work quickly to craft a workable solution to spend down some of the state’s record budget surplus.
“After passing the largest budget in state history last week, we are still in a position of excess revenues for multiple different reasons,” said Smith, who is chairman of the House budget panel. “Somewhere we need to right-size this.”
Democrats agreed that the legislation is still a work in progress.
“We haven’t had ample time really to digest this,” said Rep. Rasheen Aldridge, D-St. Louis. “We need more time to dive into this.”
Rep. Kevin Windham, D-Hillsdale, said the proposal as written could leave low-income people out of the program.
“I would like to see more data,” Windham said.
Smith agreed that he wouldn’t rush to bring the measure to the full House.
“I’m not going to move the bill out of the House until we have some of the fundamental issues addressed,” Smith said.
The proposal, as well as a similar one pending in the Senate, has generated a buzz among Missouri taxpayers.
Wyatt said people are already beginning to call the department asking about the money.
The Senate version is estimated to cost up to $2.4 billion while the House version currently is capped at $1 billion.
The legislation is House Bill 3021.
Posted at 2:55 p.m. Wednesday, April 13.
‘Missourians whose pay is so low that they don’t owe income tax are still paying taxes. In fact, the lower your earnings, the more you pay in state and local taxes as a share of what you make.’
Amy Blouin, Missouri Budget Project president