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Proposal to mandate sales tax increases in case of revenue shortages opposed by Republicans

JEFFERSON CITY - A proposal to automatically raise Missouri sales taxes when state revenue falls has been taken to task by leading Republicans.

The petition initiative, brought to Secretary of State Matt Blunt's office this week by a team of lobbyists, ignores needed policy reforms, said Senate Majority Leader Michael Gibbons, R-Kirkwood. Changes to the taxing system need to be addressed before the state seeks new revenue sources, said Gibbons, who is chairman of the Joint Committee on Tax Policy.

"Just throwing more revenue in masks structural reforms that are needed," Gibbons said. "I have a hard time advocating or being involved in tax increases when these structural reforms have yet to be addressed."

The proposal would require sales taxes to increase if per capita general revenue falls below the fiscal year 2001 level, adjusted for inflation, states a report by the measure's sponsors, the Missouri Policy Group. Sales taxes would temporarily increase by no more than one cent, under the proposed constitutional amendment, to offset the decline in general revenue, the report states. The revenue raised by the tax increase would go into a trust fund dedicated exclusively to education and health care. Revenue figures would be compared each year to the 2001 rate and the tax would be adjusted or terminated. Further, the state legislature would be able to reduce or rescind the tax.

The Missouri Policy Group, an informal organization of lobbyists representing various interests, turned in the petition initiative to the Secretary of State's office, which will draft a ballot summary and certify circulation of the petition, said Blunt spokesman Spence Jackson. Reports by the Attorney General and State Auditor are also required before petition supporters can begin seeking signatures.

But the proposal will receive limited support, House Tax Policy Committee chairman Shannon Cooper said. "I don't think the general public has any appetite for more taxes," Cooper said.

Cooper pointed out that increases in sales tax rates lead to decreases in consumer spending. Cooper, who also runs a sporting goods store, said he notices the sensitivity of discretionary consumer spending. "When the economy takes a dip, my business takes a dip," Cooper said.

The proposal's supporters, which backed the failed cigarette tax increase in November 2002, want to get the initiative on the August 2004 primary ballot. The petition would need signatures equalling 8 percent of the of the total votes cast in the 2000 gubernatorial election from six of Missouri's nine congressional districts, Jackson said. Depending on which districts petitioners target, they would need between 230,000 and 280,000 signatures.

Missourians support the proposed amendment, according to a poll funded by the Missouri Hospital Association. Sixty-five percent of poll respondents said they would "probably or definitely" vote for the measure.

But climbing taxes have taken a toll on Missourians, Cooper said. An extra penny added to sales taxes would push the rate above 10 percent in some areas, he said.

"Money's not always the solution," Cooper said.