Missouri auditor warns of potential financial problems
JEFFERSON CITY, Mo. (AP) — Democratic Auditor Nicole Galloway on Thursday warned that the state is moving toward similar financial hardship that Kansas faced after the neighboring state enacted tax cuts.
Galloway told reporters in her Capitol office that the state economy hasn’t grown enough to offset losses from recent tax breaks, including perks for some industries and a gradual individual income tax cut passed in 2014 that’s now starting to take effect. She said Missouri is not financially prepared to deal with another economic downturn.
“We’re starting to walk towards the bridge to Kansas,” Galloway said. “They have seen serious cuts to their budget because their economic promises were not fulfilled. We are not there yet, but we’re walking toward that bridge.”
Galloway added that the state’s tendency to dip into budget reserve funds for cash flow purposes could mean Missouri won’t have the money to cope if unemployment rises again to 2009 levels.
Galloway’s warnings came the same day that Republican Gov. Eric Greitens touted his plan to cut taxes further to members of the Missouri Press Association.
But Greitens told reporters that his plan is revenue neutral and said he’s confident in his administration’s analyses. Under the governor’s plan, the top tax rate would drop down to 5.3 percent in 2019 and corporate taxes would go down to 4.25 percent from the current 6.25 percent. To make up for losses, Greitens proposed eliminating tax perks for some businesses.
“Missouri is not gonna be Kansas,” Greitens said. “This is an extraordinarily thoughtful and responsible plan.”