Proposes a constitutional amendment to impose an appropriation spending limitation and to establish the "Tax Reform Fund" to be used to fund budgetary shortfalls, subject to an appropriation limitation, and allows for certain taxation changes based on revenue triggers, by general law
Impact
The envisioned Tax Reform Fund would collect excess revenues when state revenue exceeds projected expenditures by $20 million or more. This proposal establishes a direct mechanism for tax reductions that respond to state revenue levels, thereby altering the state's approach to fiscal management. With the elimination of personal income tax and property tax in the long term, the implications for state funding and public services are profound, potentially reshaping the financial landscape of Missouri. Critics may raise concerns regarding the sustainability of state funding, particularly in education and public health sectors, where funding could be impacted due to reduced tax bases.
Summary
HJR188, introduced by Representative Davidson, proposes a significant amendment to the Missouri Constitution aimed at creating a 'Tax Reform Fund' to effectively manage state revenues and taxation. The bill advocates for the repeal of Section 36 of Article III and introduces new provisions to regulate how state revenues can be appropriated. The primary goal of this amendment is to ensure that any excess revenue generated beyond a set threshold is directed into the Tax Reform Fund, which would then be utilized for reducing personal income taxes and personal property taxes gradually until they reach zero. This shift is designed to provide ongoing financial relief to Missouri residents, easing the tax burden significantly.
Contention
A central point of contention surrounding HJR188 revolves around its possible repercussions on the state's fiscal responsibilities and the services funded by taxpayer dollars. Supporters argue that capping state spending growth to population increases or a set percentage fosters fiscal discipline, while opponents fear it could hinder the state's ability to finance essential public services. With a focus on taxation relief, discussions may arise on whether such a framework could challenge the state’s commitment to adequately funding public goods and ensuring equitable resources for constituents across Missouri.
Authorizes the Tax Reform Fund for certain revenue surpluses and implements personal income tax and sales and use tax triggers based on certain funding and revenue surpluses being met