After a busy week that saw several proposals move through the Missouri Senate, my colleagues and I have reached the halfway point of the 2021 legislative session. Despite the challenges of COVID-19, I believe the first half of the legislative session has been productive, and in this mid-session report, I wanted to share a few of our accomplishments and discuss some of the bills currently moving through the legislature.
Ending Tax Incentives for Risky Developments in Flood Plains
First, I am proud to say the Missouri Senate has passed my Senate Bill 22, and it is now before the House for consideration. This legislation reforms the use of tax increment financing (TIF), which allows a developer to refund or divert a portion of their taxes to help finance their project. Normally, these taxes would have gone to local municipalities to help pay for schools, libraries and other essential city services. To qualify for TIF, the development project must be in an area that is considered “blighted.” Flood plains are considered blighted under current state law, so there is an incentive to develop in these areas despite the potential risks. This legislation changes the definition of “blighted” so flood plains cannot fall under this designation. As a result, projects in flood plains would not be eligible for TIF. Most people do not realize their tax dollars are going to private developers that do not need public assistance in the first place. It is my belief if a developer wants to gamble and build in a floodplain, they should assume all of the risk — not taxpayers. I have been working on this legislation for several years now, and I am confident we will finally pass this important reform into law so your tax dollars will no longer be washed down the river as a part of a risky development.
Leveling the Playing Field for Missouri Businesses
Senate Bill 153, more commonly known as the “Wayfair Bill,” passed the Senate this week and would require online retailers to collect sales tax on all internet purchases made by Missouri consumers. Under our current tax code, only online merchants with a brick-and-mortar presence in Missouri are required to collect sales tax on purchases made by Missourians. Unfortunately, this incentivizes consumers to buy their products online instead of shopping local. Even before the pandemic, our businesses were struggling to stay competitive with these online retailers — and the shutdowns caused by the pandemic have only made it worse. From a tax policy perspective, I believe SB 153 will level the playing field for local shops and vendors competing with online out-of-state businesses.
This legislation also creates the “Missouri Working Family Tax Credit Act,” a state level earned income tax credit (EITC) worth at least 10% of any federal EITC utilized by a taxpayer. In addition, SB 153 calls for further cuts to the state’s income tax rate if state revenues continue to grow. Current law allows the state income tax rate to be cut by 0.5%, in increments of 0.1%, if certain revenue triggers are met. Senate Bill 153 allows for three additional 0.1% cuts, on top of the existing reductions, for a total possible income tax cut of 0.8%.
This legislation now heads to the House, and I am hopeful it will be passed and signed into law by the governor this session.
Gas Tax Headed for Uncertain Future in Missouri House
On Thursday, March 11, the Senate passed Senate Bill 262, legislation increasing Missouri’s gas tax over the course of several years. According to the Missouri Department of Transportation (MoDOT), Missouri has the 7th largest highway system in the country, but ranks 45th in the nation in terms of revenue per mile. Currently, motorists pay a 17 cents per gallon gas tax at the pump every time they fill up their tank, no matter the cost of gas. Senate Bill 262 increases the state’s gas tax by 2.5 center per gallon, starting in October 2021, and raises it by that same amount each year until it reaches an additional 12.5 cents per gallon in 2025. I voted against this legislation because now is not the time to raise taxes on Missourians. While supporters might point to the fact the gas tax hasn’t been increased since 1996 and the cost to repair and replace our roads and bridges continues to rise, I believe we shouldn’t be putting this burden on the backs of taxpayers when the issue should have been addressed by previous lawmakers through the state’s operating budget. Our state’s operating budget is larger than it has ever been, and if this really is a priority, we should make the tough decisions and provide MoDOT with the funding necessary to address the needs of our state’s transportation infrastructure through federal and state funding.
Why Do We Need COVID-19 Liability Protections?
A few weeks ago, my colleagues and I passed Senate Bill 51, which would give our small businesses and health care professionals protection against lawsuits related to COVID-19. Even with precautions, it is still possible to get COVID-19 when you go out in public. Despite this knowledge, I believe some individuals who contracted COVID-19 will want to blame every establishment they visited for their exposure to the virus and pursue a frivolous lawsuit seeking damages. Our state’s small businesses, churches and schools have suffered enough during the past year, and they should not have the additional worry of a potential lawsuit simply because someone thinks they got COVID-19 at their establishment. I want to be clear, this legislation does not protect bad actors who engaged in recklessness or willful misconduct that caused exposure to the virus, but simply protects those who stepped us to serve our communities during a time of uncertainty.
During the first half of session, my colleagues and I have also discussed a few pieces of legislation that have not been passed yet, but will likely be brought up for further debate after our legislative spring break.
Education Savings Accounts: Getting “More” for Missouri Students
First, there have been a few discussions on the Senate floor regarding Senate Bill 55, which would establish the Missouri Empowerment Scholarship Accounts (ESAs) Program. This program provides parents and children with the flexibility to find an education that meets their child’s needs. Through the program, eligible students are given an ESA that contains funds that can be used to pay for tuition, tutoring, textbooks, educational therapy and curriculum and other educational-related expenses. I believe our students deserve more, not less, when it comes to their education. While SB 55 has not passed the Senate yet, House Bill 349, which establishes an ESA program, passed the House and was referred to the Senate Education Committee. I am glad a version of this legislation is moving through the legislative process, but I also look forward to the opportunity to find a way to pass the Senate version. In the meantime, I will be the Senate handler of HB 349.
Protecting Our Small Businesses from Government Overreach
My colleagues and I have also yet to pass Senate Bill 12. This important legislation would protect small businesses and our community from government overreach. Senate Bill 12 would limit the authority of local governments and municipalities during a declared state of emergency and prohibit them from issuing a health order that closes, partially closes or restricts the operations of businesses, schools, churches and other places of public or private gatherings for more than 15 days in a 180-day period, unless it is approved by the local government or the General Assembly.
During the COVID-19 pandemic, I saw the St. Louis county executive impose targeted, and what I believe were severe, restrictions on our community’s restaurants and businesses. Thankfully, with the vaccine distribution and decrease in COVID-19 cases, local authorities are beginning to lift their restrictions. However, we must protect our small businesses and restaurants from this happening in the future, and it is imperative we pass this legislation. I am hopeful we will resume debate on this important legislation when we return from our legislative spring break.
Thank you for reading my Capitol Report, and I look forward to sharing more of our work with you soon.
Sincerely,
Andrew
Andrew Koenig
State Senator – District 15