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Gov. Nixon: Income tax veto override could hurt MO credit rating

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CLAYTON, MO (KTVI) – Missouri Gov. Jay Nixon was in Clayton Monday to talk about Missouri’s AAA credit rating and how it makes the state a good place for businesses to grow. Nixon says the bill he vetoed cutting Missouri’s income tax would devastate the state budget and damage Missouri’s AAA bond rating from the three largest rating agencies.

“Never in recent memory has an action taken by the general assembly posed such a direct and dire threat to our financial health and reputation.  Budgetary turmoil and credit downgrades might be business as usual in some states, and in Washington,  but its not how we do things in Missouri ” said Governor Jay Nixon.

Just last month, Nixon vetoed veto House Bill 253 saying the bill’s $800 million price tag would hurt the state’s economic health and jeopardize funding for education.

Last week, the governor sent a letter to members of the Missouri House and Senate regarding findings by the three leading independent credit rating agencies, Standard & Poor’s, Fitch, and Moody’s, regarding the potential impact of House Bill 253. According to the letter, the Governor says that the state budget deficits the income tax cuts would create would make it difficult for Missouri to maintain its AAA bond rating.

Read the full text of the Governor’s letter here.

The Republican-controlled legislature passed the income tax cut last session, but Democrat Nixon vetoed it, saying it would rip a hole in the state’s budget. The independent Missouri Budget Project has estimated that slashing individual and corporate income taxes, as proposed in the bill, would leave Missouri with a yearly budget shortfall somewhere between $700 million and $1.2 billion dollars.

Groups bankrolled by St. Louis Libertarian millionaire Rex Sinquefield have begun running TV ads across the state, urging lawmakers to override the governor’s veto.