Bad Policy Plus Bad Politics Equals Bad for People

I can hear the conversation now “Hey Martha, didn’t our legislator tell us they wouldn’t vote for a tax increase?” Martha, “Yes Harry they did. Why?” Harry, “Well we just got a tax bill for a new tax on that truck we bought from Frank in June. I don’t care what they said, that’s a tax increase!”

This conversation or a similar one will take place in over 123,000 households in Missouri this fall if the legislature makes the bad and incorrect decision to override Governor Nixon’s veto on House Bill (HB) 1329. HB1329 had good intentions but represents the worst scenario possible for all of us but especially legislators: bad policy and bad politics! Usually you can work through one of those but not both.

The attempt to defend HB1329 has been to draw our focus to “out-of-state” car purchases and leveling the field for Missouri car dealers. I’m sure we can all appreciate that effort. But I’m equally sure we want what ever is done to be done right and be constitutional!

Many legislators I have talked with don’t understand that the retroactive taxation of people who have purchased a car since the unanimous Supreme Court ruling throwing the tax out applies to individual to individual sales, not just out-of-state car purchases. While I don’t have the numbers – although I’m certain they will be known before the election on November 6th – I would wager that the majority of those 123,000 transactions currently subject to the new retroactive tax are individual to individual sales!

I’m pretty sure when Governor Nixon sent the letter to legislators and the media (copy of one here) it’s pretty clear that those tax bills will go out prior to the November 6th election. I think it is also likely that any legislator voting to override the Governor’s veto will see that tax increase vote in their opponent’s campaign literature – and it will be a correct accusation.

The solution is simple – let the local governments place the use tax on the local ballots as required by the state constitution! The government associations such as the Missouri Association of Counties (MAC) – full disclosure I served on the board of directors when I was a county councilman from St Charles – and the Missouri Municipal League (MML) – an organization who never met a tax they didn’t like as long as they were getting a part of it – are trying to convince legislators to override the Governor’s veto. They claim to be representing their constituents but they are really representing their member governments not constituents!

These entities are wailing about lost revenues but that claim is bogus. How can we know that? Well for starters, we can look at the fact that counting the November 6th election, there will have been 3 elections that EVERY county and city that does not currently have a use tax could have placed a use tax on the ballot. Why didn’t MAC and MML encourage their members to do so? If they did, they weren’t very effective.

At last count – it could change as this week’s ballot measure deadline has recently closed – only 14 counties have placed the measure before their voters via the ballot. Three (3) of these votes have already taken place and 2 of 3 passed.

Instead, MAC and MML are banking on legislators to ignore the state constitution so their member governments won’t “have” to place the use tax on their ballots and to override the will of many voters in the state who have already voted AGAINST use taxes – some of them multiple times.

HB1329 may have sounded good when it was originally passed. Now that more information is available, legislators have the opportunity to re-think HB1329.