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Parson still evaluating Trump’s payroll tax deferral

Parson still evaluating Trump’s payroll tax deferral

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Gov. Mike Parson, R-Mo., listens as President Donald Trump speaks during a lunch with governors in the Roosevelt Room of the White House, Thursday, June 21, 2018, in Washington. (AP Photo/Evan Vucci)

JEFFERSON CITY — Although Missouri’s Republican governor has tied himself closely to President Donald Trump as he runs for a full, four-year term, his administration has not yet jumped on board the president’s offer to defer payroll taxes for thousands of state employees.

With congressional negotiations over a new coronavirus stimulus bill at a stalemate, Trump announced an executive order last month allowing employers to temporarily stop taking the 6.2% tax out of paychecks of people earning $4,000 or less per biweekly pay period beginning Sept. 1.

For the 53,246 workers on the state’s payroll, that would have amounted to an average monthly increase in their take-home pay of about $250 per month through the end of the year.

But the taxes would be deferred, not eliminated, and people would have to repay them early next year.

Although workers are already in the September pay period, a spokeswoman for Gov. Mike Parson said a decision hasn’t been finalized.

“At this time, we are carefully evaluating the (executive order),” Kelli Jones said.

“We are reviewing which other states and which Missouri employers are participating,” added Sarah Steelman, commissioner of the Office of Administration.

In all, the state pays an average of $13.5 million each month in payroll taxes, which are used to fund Social Security. The state’s next round of paychecks go out Sept. 15.

The payroll tax deferral has received an icy response from business and trade groups, who say it will create a significant tax liability for workers. They also worried about the time and expense of temporarily altering their payroll systems.

“Without congressional action to forgive this liability, it threatens to impose serious hardships on employees who will face a large tax bill as a result of deferral,” the U.S Chamber of Commerce said in a letter to Congress. “Many of our members will likely decline to implement deferral.”

The state of California announced last week that it will not participate in the deferral, which affects 230,000 government employees.

The hedging by Parson comes after his administration jumped at the chance to pay an extra $300 per week to those on unemployment.

Trump authorized the funding at the same time he announced the payroll tax deferral after Congress failed to reach a deal extending the $600 federal unemployment supplement that expired at the end of July. It will use as much as $44 billion from a federal disaster response fund, money that usually goes to communities hit by hurricanes, floods or wildfires.

The Missouri Department of Labor was among the first states to apply for and received $200 million for the new program, called Lost Wages Assistance. The Federal Emergency Management Agency approved Missouri’s application, along with those of Colorado and Utah, on Aug. 16.

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