Of the six elected statewide officeholders, the only one with a truly conservative grasp of the state’s dire budget situation is the only Democrat, Auditor Nicole Galloway.
On Feb. 8, Galloway published the results of what she called a budget “stress test” done in conjunction with the University of Central Missouri. It is the last of a series of reports examining the state’s fiscal situation. The results are not pretty, but should be understood by every Missourian.
Despite low unemployment and an economy ranked 11th nationally for fiscal health in a 2017 study, the state budget is under severe stress, the report found. Years of tax cuts and tax incentives, most of them for businesses, and growing Medicaid costs mean less money to meet basic obligations. If the economy tanks again, the state will be in real trouble, Galloway said.
“We’re starting to walk towards the bridge to Kansas,” she said. “They have seen serious cuts to their budget because their economic promises were not fulfilled. We are not there yet, but we’re walking toward that bridge.”
It’s not just Kansas. Oklahoma, too, cut taxes drastically in the late 2000s on the promise that the cuts would juice the economy and pay for themselves. Gov. Mary Fallin, a Republican who supported the tax cuts, has admitted they haven’t worked and proposed higher taxes.
But in Missouri, where a $250 million budget cut is looming in part because an income tax cut enacted in 2014 is just kicking in, Gov. Eric Greitens and some state senators are touting even more tax cuts.
Their plans rely on “supply side” economic voodoo. Galloway’s report uses actual numbers to demonstrate why tax cuts won’t pay for themselves.
For growth to recapture just the $500 million whacked from the current year’s budget, the state this year would have to create approximately 168,000 jobs paying the state average wage, Galloway’s report said. That’s more than three times what Amazon is promising the city that wins its second headquarters designation.
For purposes of comparison, in the past seven years, the state added an average of about 25,400 jobs a year. If we do six times better than average this year, we’ll pay for some of the tax cuts.
Because of all the corporate tax cuts since the Legislature turned red in 2003, families are shouldering an increasing share of the Missouri tax burden — up to 65 percent from 53 percent. In many places local property taxes have gone up to offset state cuts to K-12 education.
“Budgeting requires the courage of common sense,” Galloway said. Even in Jefferson City, this should not be controversial.