Local school officials fear Mo. senate bill could hurt education funding
Slater and Marshall Public Schools superintendents are concerned with a bill recently passed in the Missouri Senate, which they say could drastically cut funding for education.
Senate Bill 26, sponsored by Will Kraus, R-Kansas City, seeks to increase sales tax rates by .5 percent while lowering personal and corporate state income tax by .75 percent over a five-year period. The bill would also create a $2,000 deduction for those making less than $20,000 adjusted gross income, add language to help with out-of-state and internet tax collection, and would create a small business deduction for pass-through business income of 50 percent over five years, among other provisions.
Slater Public School Superintendent Terry Lorenz shared his concerns about SB 26 at the Slater Board of Education regular meeting Tuesday, March 19.
"The negative impact that's going to have in education around Missouri is almost beyond belief," Lorenz said.
Lorenz said estimates indicate the bill could reduce funding for education throughout the state by $650 million up to $950 million.
He said education in Missouri is already not completely supported, with state funding somewhere between 90 and 92 percent of the amount required by the state funding formula. If SB 26 becomes law and another $650 million are cut from education, funding would be taken down to the low 80 percent, Lorenz said.
"In Slater dollars, roughly if you use that same sliding scale, it would have an impact of another $150,000 for us," Lorenz said.
Kraus did not immediately returned calls seeking comment. In a news release, however, he said he does not foresee Missouri revenues dropping.
"Most of the discussion around SB 26 revolves around how much it will cost the state," Kraus said in a news release. "Estimates are that, once implemented over five years, it will reduce revenue by about $477 million. Since we generally grow revenue every year, I don't foresee that revenues will ever actually drop because of this bill."
The bill passed the Senate on a 22-11 vote, with Sen. David Pearce (R-Warrensburg), who represents Saline County, the only Republican in the Missouri Senate opposing the bill.
"I just have some major concerns that when you are reducing income to the state so quickly, you are going to cut essential programs," said Pearce, who is chairman of the Senate Education Committee.
Pearce said he received some criticism from fellow Republican senators for his vote against the bill. He said it was one of the toughest decisions this year, but he is confident his constituents stand behind him on his decision.
"One of the things we discuss every year in the legislature is what the role of government should be and and how you are going to pay for it," Pearce said. "When it comes to tax policy, you need to provide the basic services the people of Missouri need without over taxing. Education is one of those basic services you have to provide."
Marshall Public Schools Superintendent Ryan Huff said he was also concerned with the bill.
"SB 26 is bad for Missouri schools and bad for Missouri kids," Huff said. "This bill has the potential to further limit the funding available to Missouri public schools. Missouri schools are already underfunded by the standard set by the Missouri legislature."
In 2012, the state of Kansas passed similar legislation, reducing personal income tax, cutting income taxes for most small businesses and lowering the state sales tax. In his news release about SB 26, Kraus said Missouri needed to catch up to similar tax reform.
"If Missouri does not fundamentally change our tax policy, we will fall behind states like Kansas, Oklahoma and other neighbors who are reforming their tax systems," Kraus said in the news release. "The fiscal impact on the state as businesses and residents choose to leave could be devastating."
Pearce, however, said he was not sure a reactionary measure to what Kansas did was the best solution for Missouri.
"This bill (SB 26) is a knee-jerk reaction to what Kansas did," Pearce said. "Kansas is going to have some real problems maintaining those tax cuts."
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Senate Bill 26
Senator David Pearce
Senator Will Kraus