Senator David Pearce (r) (left) and Representative Denny Hoskins (r) (right) speaking at a forum on the campus of the University of Central Missouri sponsored by the Faculty Senate.

On Friday afternoon Senator David Pearce (r) and Representative Denny Hoskins (r) spoke on the budget at a forum sponsored by the University of Central Missouri Faculty Senate. The legislators (their districts include the university) spoke in turn for approximately twenty minutes and then took questions for the remainder of the hour. There were about thirty-five to forty individuals in attendance.  

Representative Denny Hoskins (r): ….I mean for goodness sake we even cut the personal chef of the Governor and that was a, only a, I think a forty thousand dollar cut and, uh, I, I still don’t believe that, uh, the Governor’s wife will be behind the, in kitchen, behind the grill and cooking meals for some of the different constituents they have there. But I think it, at least it would serve as a discussion point in order to see if, if maybe it would be more cost effective have meals catered or something like that….

….I think right now, with our budget crises and budget crunch, crunch I don’t think that there’s anything off the table. I think everything at least deserved to be discussed and vetted…

…trying to think outside the box, how can we raise revenue? One of the, one of the things that’s been discussed in the Senate and over in the House is, uh, Internet, sales tax on Internet purchases. Um, right now we’re supposed to pay, uh, any time you shop at the Gap or Bass Pro or anywhere else you’re supposed to pay sales tax on that. Uh, as the, the system in Missouri. But, right now, I, we took a show of hands I bet a lot of us are not paying sales tax on that or use tax on that. And so, what this bill would do is basically just enforce the current law that we already have in order, um, because, it, it’s, what, what it’s doing is killing our retail, our brick and mortar shops around Warrensburg and, and the other cities because they don’t, you have to pay sales tax when you go in there and so I think it’s only appropriate that we would enforce the current laws that we have in order to pay sales tax on Internet purchases as well….

….Question: We’re starting to see in some other state legislatures along with the process of cutting the budget, uh, a slow acknowledgment that revenues need to be increased. And there are some states that are starting to look towards tax increases. Any suggestion of that here in the state? Or, how bad would things have to get before you would see your colleagues thinking about raising revenue?…

…Senator David Pearce (r): Um, right now the Governor and the legislature said we’re not gonna raise taxes. Uh, and, and, uh, we’re from the show me state and I think that, uh, people actually have to see what cuts are actually gonna look like and have to feel them before the state will rally, uh, and ask for a tax increase. Uh, I do have some colleagues who signed a no new taxes pledge., there’s some organization out there, no new tax pledge. I did not sign that. Uh, because I think as [applause], uh, [laughter] I think, I think as a leader that you have to, to be able to, uh, have those things at your disposal. And so, um,  at this point there, there haven’t been, uh, there hasn’t been a big thing like that, but, [inaudible].

Representative Hoskins (r): Uh, um, I did not sign on to the no tax increase pledge [applause] either. Um, I, you know, I don’t want to tie my hands and take anything off the table, but, right now I’m not in favor of any, uh, tax increase. I think it’s, I know there’s been some stories out there that fifty percent or forty-seven percent of the population do not pay any income tax  and, uh, some other studies that showed the top ten percent of, of earners pay about seventy-three percent, I believe it was, of all the income tax. So right now there, um, the Governor as well as the legislature said, no, uh, no to new any more tax [inaudible].

Question: Can, can I [inaudible] how much you just said Representative Hoskins?

Representative Hoskins: Yes.

Question: Because we had an e-mail exchange about a month ago. You did vote for what’s called TABOR, the tax payer bill of rights, which was in Colorado.

Representative Hoskins: It’s not called TABOR. [crosstalk]

Question: Well, it was in Colorado, though. And it, and it tie, it essentially will be a constitutional amendment, I think, that you voted for that will be voted on in November that will tie any tax, any revenue increases to the population growth and inflation. You just said you didn’t want to tie your hands. Doesn’t that legislation tie your hands?

Representative Hoskins: I don’t believe that legislation, uh, ties your hands. [inaudible] And I would say, you know, do you, do you like havin’ a, uh, decrease in funding for higher education?

Question: But, that, yeah, which raises an interesting question, though. When revenue ever comes back, if you limit revenues, how do we ever get a, uh, cost of living increase?

Representative Hoskins: Well, and what I would say is that, um, this plan was in, in effect back when we had the boom years we would have been able to set some of that, those funds asides for these, uh, down years. So, and I, I’ve always find it interesting when people, you know, I, I say well, do you, do you like taking the cut? And they say, well, no. And I say, well, you know, under this plan, you know, we would have been able to save some of that money back from the boom years and would have helped fund during the short years.

Question: I, is this plan rolling back the Hancock restrictions on state revenue?

Representative Hoskins: No, in, in the Hancock amendment, when, when it came, that’s, when we talk about tax credits, that’s when, uh, back in the boom years, that’s one of the reasons we had to come up with a lot of these tax credits is because the legislature back, the way I understand it, the legislature back in the nineties, uh, when revenue did come back, come in [inaudible] more than expected the Hancock amendment kicked in and so therefore, instead of giving, uh, I don’t, I don’t know if, if the legislature could not, uh, give refunds back to the people, because they had too much money, or if they chose not to. But, a lot of these tax credit programs came up then that we’re really concerned about now because the way these tax credits, like the example I, I used, it’s that, uh, you know, I’m a developer I go out and build on a project, I, because the State of Missouri can’t write a check to R and D Developers or, or whoever developers, but they can offer tax credits. And so a way to draw down some of that extra excess that they had, what they would do, is they would give that developer a, a tax credit in order to build one of these projects or, or developments. And so then with a, uh, so let’s say that developer was issued a million dollar tax credit. Well they came in with a hundred thousand dollars in Missouri income tax that they were supposed to pay and the check had, the State of Missouri wrote a check for nine, the difference, nine hundred thousand back to that developer.

Question: Just, just one more question. I apparently have mischaracterized the legislation you support. Would you please tell us exactly what this bill will do to revenue increases that the state has? It does put a cap, my understanding, on the revenue coming in to the state based upon population growth and inflation.  Now, and as a consequence, if we go over that cap, what happens to the money? You voted for this, so please tell us.

Representative Hoskins: Let, uh, I’d be glad to talk with you afterwards. I know there’s a lot of details of that bill and we discussed this last year as well. I know [crosstalk]…

Question: At, at approximately the same level of generality. I’d like you to be more specific.

Representative Hoskins: Okay. I’d be glad to visit with you and go in detail on that bill afterwards [inaudible]….

Afterwards? Because no one else in the room was interested in those details?

Article X, sections 16 through 24, of the Missouri Constitution (republicans call it the “Hancock amendment”), is it good or bad? You can’t tell from Denny Hoskins’ answer.

REVIEW OF ARTICLE X

SECTIONS 16 THROUGH 24

CONSTITUTION OF MISSOURI

TWO YEARS ENDED JUNE 30, 1999

…On November 4, 1980, the voters of Missouri passed Constitutional Amendment No. 5, which added Article X, Sections 16 through 24 to the Constitution of Missouri. The amendment, commonly referred to as the Hancock Amendment, requires that no greater portion of Missourians’ personal income be used in any future year to fund state government than was the case in fiscal year 1981, except as authorized by a vote of the people…

[pdf]

The limits as set in the Missouri Constitution:

Missouri Constitution

Article X

TAXATION

Section 18

August 28, 2009

Limitation on taxes which may be imposed by general assembly –exclusions–refund of excess revenue–adjustments authorized.

Section 18. (a) There is hereby established a limit on the total amount of taxes which may be imposed by the general assembly in any fiscal year on the taxpayers of this state. Effective with fiscal year 1981-1982, and for each fiscal year thereafter, the general assembly shall not impose taxes of any kind which, together with all other revenues of the state, federal funds excluded, exceed the revenue limit established in this section. The revenue limit shall be calculated for each fiscal year and shall be equal to the product of the ratio of total state revenues in fiscal year 1980-1981 divided by the personal income of Missouri in calendar year 1979 multiplied by the personal income of Missouri in either the calendar year prior to the calendar year in which appropriations for the fiscal year for which the calculation is being made, or the average of personal income of Missouri in the previous three calendar years, whichever is greater.

(b) For any fiscal year in the event that total state revenues exceed the revenue limit established in this section by one percent or more, the excess revenues shall be refunded pro rata based on the liability reported on the Missouri state income tax (or its successor tax or taxes) annual returns filed following the close of such fiscal year. If the excess is less than one percent, this excess shall be transferred to the general revenue fund.

(c) The revenue limitation established in this section shall not apply to taxes imposed for the payment of principal and interest on bonds, approved by the voters and authorized under the provisions of this constitution.

(d) If responsibility for funding a program or programs is transferred from one level of government to another, as a consequence of constitutional amendment, the state revenue and spending limits may be adjusted to accommodate such change, provided that the total revenue authorized for collection by both state and local governments does not exceed that amount which would have been authorized without such change.

   (Adopted November 4, 1980)…

[emphasis added]

So, is the representative advocating repeal?