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Nixon warns schools of impending cuts

Thursday, July 25, 2013

Nevada Daily Mail

Gov. Jay Nixon is taking his battle with the Missouri Legislature over a bill that would reduce income taxes directly to the school districts in the state, which presumably would feel the most negative impact.

On Monday, Nixon released figures requested by the Missouri Association of School Administrators from the Missouri Department of Elementary and Secondary Education detailing the impact of House Bill 253 on every district. Nixon vetoed the bill and announced he intends to withhold $400 million from the state budget, including $66 million from Missouri schools if his veto is overturned.

"At a time when quality schools and a skilled workforce are more important than ever to competing in the global economy, this reckless fiscal experiment would undermine permanently Missouri's ability to support public education and other vital services," Nixon said in a prepared statement. "As these numbers make clear, lawmakers can either support House Bill 253 or they can support public education, but they can't do both."

The data shows a breakdown of district funding levels under two scenarios if House Bill 253 becomes law. The first uses the General Assembly's fiscal note, which estimates a total cost of $692 million once the bill is fully implemented.

The second shows funding levels if the Federal Marketplace Fairness Act becomes law, which would increase the cost of House Bill 253 to $1.2 billion in Fiscal Year 2014.

According to the MASA figures, rural districts in Vernon County and the El Dorado Springs R-II district would lose thousands of dollars and result in cuts across the board. Bronaugh would lose $76,206 to $131,895 while Hume would lose $57,176 to $98,961. Northeast Vernon County would lose $64,273 to $111,242 and Sheldon would lose $57,487 to $99,469. Nearby El Dorado Springs would lose $398,422 to $689,576.

The Nevada R-5 District would lose an estimated $736,808 to $1.275 million, but may not experience as deep an impact because it is able to absorb more loss in revenue than small districts.

Nevada Superintendent Dr. David Stephens was out of the office and not available to comment. He is expected back Thursday.

House Bill 253 changes the laws regarding the streamlined sales and use tax agreement, tax amnesty, the community development district tax, income tax, sales and use taxes, use tax nexus and the transportation development tax.

Beginning in the 2014 tax year, the maximum tax rate on personal income would be reduced by .5 percent and corporate income by 3 percent over a period of 10 years. This reduction could only occur if the tax revenues collected in the current year exceeded the prior year's by $100 million. The bill also requires no caps or thresholds to exist on sales or use taxes.

In effect, the bill attempts to steadily lower the income tax rate for individuals and businesses while leaving open the option for increasing the sales tax.

Bronaugh superintendent Lyle Best said he hopes he doesn't have to deal with that scenario. Bronaugh has already eliminated two teaching positions and the Industrial Arts program.

"It would be difficult to maintain salary and benefits or increase salaries going forward," Best said.

That's a feeling shared by Hume superintendent David Quick, who said if an override is successful, it will mean more program cuts. Hume had already eliminated support staff positions.

"We are already cut to the bone," Quick said. "The bill is a bad piece of legislation."

NEVC superintendent Charles Naas said without those funds he would be looking at personnel cuts because there's nothing else to cut from.

"It's hard to believe its gotten this far," Naas said. "People see tax cuts and they are all for it. It's kind of a lack of seeing the big picture."

"This is crazy," NEVC board member Bill Alexander said.

Sheldon finished the fiscal year with a $5,000 surplus but will lose that and more with a successful override of the governor's veto.

Sheldon superintendent Tim Judd also was out of town and available for comment.

El Dorado Springs superintendent Mark Koca said the impact of this bill is devastating.

"This would cut 3 percent of our budget," Koca said. "I've already budged half a million in the red this year. We would have to cut programs and lay off staff."

He said Missouri needs to lessen the tax burden without damaging the state.

"It's a scary thing," he added.

All of the superintendents urge people to contact local legislators and show support for the veto.

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