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The check is not in the mail: Parson expected to tank tax rebate plan

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Missouri State Capitol in Jefferson City

The Missouri State Capitol building in Jefferson City as seen on Thursday, Jan. 6, 2022. Photo by David Carson, dcarson@post-dispatch.com

JEFFERSON CITY — Gov. Mike Parson appears on track to veto a plan that would have given Missouri taxpayers election-time rebates of up to $500.

The move, which could be announced Friday, was anticipated after the Republican chief executive expressed skepticism in May about the hastily crafted proposal.

His official schedule shows a raft of legislation he plans to sign this week, but the tax rebate is not on the list. Parson is expected to issue a round of vetoes of various bills on Friday.

Unlike all members of the House and half of the Senate, Parson is not running in the 2022 election and is barred by term limits from seeking another four years in the 2024 election.

Under legislation first floated in the House and then adjusted and approved in the Senate, individual income filers would receive up to $500, while joint filers could expect to receive up to $1,000. Missourians eligible for the tax credit must have earned less than $150,000 as individuals and $300,000 for married couples. The state will credit taxpayers $1 back for every $1 paid in taxes, up to $500.

The cost of the program is $500 million, meaning the rebates could be prorated to a lower level if more than the total cost is claimed. Missourians who did not pay income taxes in 2021 would not be eligible.

Word of the pending veto emerged Monday after the governor released a schedule for this week outlining his plans to take action on the remaining bills on his desk.

Included in that list is the overall state budget.

The tax rebate proposal was stitched together in the closing days of the Legislature’s annual session after election-minded lawmakers had approved a massive $49 billion spending plan that left more than $1 billion in tax revenue unspent.

State coffers are brimming after receiving billions of dollars in federal pandemic aid. Income and sales tax revenues also have been robust.

Although the state can afford to give some of that tax revenue back to voters, Parson raised concerns about the income caps, suggesting that someone earning $160,000 should not be left out of the rebates.

He suggested the income limits create winners and losers.

“Look, we’ve cut taxes twice since I’ve been governor of the state of Missouri. And we cut them for everybody,” Parson said, pointing to reductions in the state’s income tax rate pushed by Republican majorities in the House and Senate.

Parson’s early skepticism was shared by other groups, including the AARP and the Missouri Budget Project, who said the rebate plan would not be available to an estimated 36% of low-income Missourians and senior citizens because they earn too little to pay income taxes.

“Older adults shouldn’t be left out of a tax rebate when they’re struggling to put food on the table and pay for essential medications, and neither should their kids or grandchildren,” said Jay Hardenbrook, advocacy director for AARP Missouri.

The legislation is House Bill 2090.

Posted at 11:15 a.m. Tuesday, June 28. 

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