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Jay Ashcroft wants to eliminate Missouri’s income tax

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Missouri Secretary of State Jay Ashcroft wants to eliminate the state’s income tax, which provides two out of every three dollars in the state’s general revenue fund, and says budget cuts can pay for it.To help craft the plan, Ashcroft has enlisted some of the well-known conservative economists and low-tax advocates that advised then-Kansas Gov. Sam Brownback on a massive tax cut enacted in that state in 2012. The resulting plunge in revenues led to the repeal of the cuts in 2017 and contributed to Republicans losing the Kansas governorship in the 2018 election.Ashcroft, one of the leading candidates for the Republican nomination for governor, said he will not repeat the Kansas debacle.“I can’t tell you we’re going to repeal the income tax all in one day,” Ashcroft said in an interview with The Independent. “It’s not going to work out that way. But we’re going to put the state on the glide path to do that.”Ashcroft also wants to repeal the 12.5-cents per gallon fuel tax increase enacted in 2021. That increase is being phased in at 2.5 cents per year. So far, 7.5 cents has taken effect, with another 2.5 cents per gallon to be added July 1 and again on July 1, 2025.A lawsuit that found the Highways and Transportation Commission had authority to use money in the state Road Fund to finance a program to raise salaries shows the new tax wasn’t really needed, Ashcroft said. The October ruling is being appealed and no raises beyond the general state pay plan have been awarded.“When that gas tax got passed, the immediate thing that transportation did was they started giving out salary increases to people,” Ashcroft said. “It wasn’t about new roads. It wasn’t about repairing roads. First and foremost. It was about new salaries.”The $50 million salary plan was the Missouri Highways and Transportation Commission’s reaction to rapid turnover in the department. The tax increase, when fully implemented, was expected to add $337.5 million annually to the state road fund and provide $125 million for city and county governments to spend on local roads when it was passed in 2021.The department said at the time that the extra money was essential to matching available federal highway funds.Ashcroft unveiled his tax proposal last week and it immediately drew sarcastic criticism from one of his rivals for the nomination, state Sen. Bill Eigel of Weldon Spring.“Nice to have you endorsing my plans…,” Eigel wrote on social media. “Where have you been the last 8 years? If only you were a real conservative in office, not just during the campaign…”On his campaign website, Eigel states he wants to eliminate both the personal and corporate income taxes and the personal property tax that almost entirely funds local government operations.Lt. Gov. Mike Kehoe, the other Republican running a full-scale campaign for the nomination, has not posted any stands on tax policy on his campaign website or reacted to Ashcroft’s proposal on social media.In a statement issued by campaign spokesman Mike Hafner, the Kehoe campaign takes partial credit for the tax cuts enacted while he was in the Senate, saying he voted for tax cuts totaling $2.5 billion.Kehoe, like Ashcroft and Eigel, wants to repeal the income tax, the statement read.“As governor, Mike will continue this progress by working to eliminate the income tax altogether and control state spending,” the statement read.Democratic candidates for governor asked for reactions to Ashcroft’s proposal noted the overlapping of low-tax advocates of the group that advised Brownback in Kansas and the “task force of experts” Ashcroft says he enlisted to help him.At least three – Arthur Laffer, creator of the Laffer Curve purporting to show the relationship between tax rates and total revenue; Stephen Moore of the Heritage Foundation; and Jonathan Williams of the American Legislative Exchange Council – were on Brownback’s advisory panel.Other prominent names are Grover Norquist, who founded Americans for Tax Reform, and Aaron Hedlund, a former University of Missouri economist who now works at Purdue University, who was chief economist for the White House Council of Economic Advisers during President Donald Trump’s final year in office.Norquist, in 2015, two years after Brownback’s cuts and at a time when revenues were far short of projections, said other states should emulate its moves.“Kansas is the future,” he said in an interview. “Kansas is the model.”House Minority Leader Crystal Quade of Springfield, a Democrat running for governor, said Missouri’s current tax system needs reform, but “trusting the same people who thought up the failed Brownback debacle in Kansas would be laughable if the stakes for hardworking Missouri families weren’t so dire.”Quade’s chief opponent in the Democratic primary, businessman Mike Hamra of Springfield, also noted the links to the Kansas cuts.“This is a strategy for earning Grover Norquist’s support and funding in the primary, not a realistic plan for moving Missouri forward,” Hamra said. “Kansas tried this experiment a decade ago with disastrous results – a budget crisis, schools closing weeks early, multiple credit downgrades, and slowed economic growth.”Budget cutsAshcroft, in the interview, did not name any new source of revenue he would propose to replace the almost $10 billion generated by the income tax.Instead, he said, every dollar spent by the state should be examined and if it does not pay for education, public safety or “roads, bridges and waterways,” it should be reduced or eliminated.“It’s gonna have to be kind of a starting from the beginning, what are the core responsibilities of the government, and then how do we pay for those core responsibilities?” Ashcroft said.There are numerous earmarked funds in state government, ranging from fees paid to licensing boards and appropriated for regulatory operations to taxes that pay for conservation and state parks.Missourians should be asked if they want to retain those earmarked accounts or put all the money into the general revenue fund for appropriation as determined by lawmakers, Ashcroft said.“We need to not just figure out how to limp along for another five to 10 years, but how do we put our state on the path we want for the next 30 or 40?” Ashcroft said. “And it’s going to have to be looking at not just a general revenue, it’s going to be looking at some of those special funds and going back to people.”In the webpage on his tax plan, Ashcroft cites states that have no income tax as having superior economies. Some of those states, like Tennessee and Texas, have high sales tax rates and others, like Alaska, have taxes on extraction of natural resources that provide the bulk of state revenues.Missouri is already a high sales tax state, mainly because local option taxes, on average, almost double the 4.225% rate imposed for state purposes.When pressed on where he would find the revenue to operate state programs without an income tax, Ashcroft again referred to the need to cut spending.“You’ve got to cut and that’s the hardest thing for any elected official to do because they want to be able to hand out stuff,” Ashcroft said.Income taxesFrom 1972 to 2018, the top income tax rate in Missouri was 6% of taxable income above $9,000.The last time the tax code was changed so the income tax would produce more revenue was in 1993, when lawmakers capped the deduction for federal income taxes so wealthy Missourians would pay more in state taxes.The corporate income tax rate was also increased in 1993 and was set at 6.25%.Soon after Kansas enacted its tax cuts in 2012, the Republican supermajorities in the Missouri legislature tried to follow suit. With the dire results of immediate sharp cuts apparent by 2014, a bill passed over the veto of Gov. Jay Nixon made small cuts of 0.1 percentage point in the top rate contingent on an annual revenue growth target of $150 million.The growth trigger wasn’t achieved until fiscal 2017 and the first cut took effect on Jan. 1, 2018.Since Republicans took control of the executive branch with the election of Eric Greitens in 2016, the cuts have accelerated.This year, the top tax rate is 4.8% for taxable incomes greater than $8,911. There are three adjustments of 0.1 percentage point to come that will be triggered by revenue growth of at least $200 million.In the period since the first income tax cuts took effect, income tax receipts have increased from $7.2 billion in fiscal 2018 to just under $10 billion in the year that ended June 30.When the next cut will occur is uncertain. Revenue is expected to fall 0.7% in the current year and actual receipts through Friday show a decline slightly larger than that amount. And revenue is not expected to grow substantially in the coming fiscal year.That means the next reduction in the top income tax rate would not occur until at least Jan. 1, 2027.Republicans have also been busy exempting income from taxation and cutting the corporate tax.The 2014 tax law also cut the percentage of income from businesses that is reported on personal tax returns, taxing only 75% of the total.Quade, in a statement, argued those tax cuts overwhelmingly benefited higher-income Missourians.“The last few income tax cuts passed by Republicans have overwhelmingly given the rich tax breaks,” she said, “while working Missourians save pennies.”Last year, lawmakers passed a bill making Social Security and retirement income off limits for the state income tax.The corporate tax rate was cut to 4% effective in 2020, and the Missouri House is poised to pass a bill this year completely eliminating the tax.The general revenue fund took in $14.8 billion in the year that ended June 30, before paying out refunds. The personal income tax provided just over two-thirds of that amount, with another 20% from sales tax.Corporate taxes made up 7.1% of the total, or about half the amount that didn’t come from personal income or sales taxes. The rest comes from interest on daily balances, liquor and beer taxes and other small levies.The Missouri Constitution requires “twenty-five percent of the state revenue, exclusive of interest and sinking fund, to be applied annually to the support of the free public schools.”

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Poll: Support for Missouri abortion rights amendment growing

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A proposed constitutional amendment legalizing abortion in Missouri received support from more than half of respondents in a new poll from St. Louis University and YouGov.That’s a boost from a poll earlier this year, which could mean what’s known as Amendment 3 is in a solid position to pass in November.SLU/YouGov’s poll of 900 likely Missouri voters from Aug. 8-16 found that 52% of respondents would vote for Amendment 3, which would place constitutional protections for abortion up to fetal viability. Thirty-four percent would vote against the measure, while 14% aren’t sure.By comparison, the SLU/YouGov poll from February found that 44% of voters would back the abortion legalization amendment.St. Louis University political science professor Steven Rogers said 32% of Republicans and 53% of independents would vote for the amendment. That’s in addition to nearly 80% of Democratic respondents who would approve the measure. In the previous poll, 24% of Republicans supported the amendment.Rogers noted that neither Amendment 3 nor a separate ballot item raising the state’s minimum wage is helping Democratic candidates. GOP contenders for U.S. Senate, governor, lieutenant governor, treasurer and secretary of state all hold comfortable leads.“We are seeing this kind of crossover voting, a little bit, where there are voters who are basically saying, ‘I am going to the polls and I’m going to support a Republican candidate, but I’m also going to go to the polls and then I’m also going to try to expand abortion access and then raise the minimum wage,’” Rogers said.Republican gubernatorial nominee Mike Kehoe has a 51%-41% lead over Democrat Crystal Quade. And U.S. Sen. Josh Hawley is leading Democrat Lucas Kunce by 53% to 42%. Some GOP candidates for attorney general, secretary of state and treasurer have even larger leads over their Democratic rivals.

Brian Munoz

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St. Louis Public RadioHundreds of demonstrators pack into a parking lot at Planned Parenthood of St. Louis and Southwest Missouri on June 24, 2022, during a demonstration following the Supreme Court’s reversal of a case that guaranteed the constitutional right to an abortion.

One of the biggest challenges for foes of Amendment 3 could be financial.Typically, Missouri ballot initiatives with well-funded and well-organized campaigns have a better chance of passing — especially if the opposition is underfunded and disorganized. Since the end of July, the campaign committee formed to pass Amendment 3 received more than $3 million in donations of $5,000 or more.That money could be used for television advertisements to improve the proposal’s standing further, Rogers said, as well as point out that Missouri’s current abortion ban doesn’t allow the procedure in the case of rape or incest.“Meanwhile, the anti side won’t have those resources to kind of try to make that counter argument as strongly, and they don’t have public opinion as strongly on their side,” Rogers said.There is precedent of a well-funded initiative almost failing due to opposition from socially conservative voters.In 2006, a measure providing constitutional protections for embryonic stem cell research nearly failed — even though a campaign committee aimed at passing it had a commanding financial advantage.Former state Sen. Bob Onder was part of the opposition campaign to that measure. He said earlier this month it is possible to create a similar dynamic in 2024 against Amendment 3, if social conservatives who oppose abortion rights can band together.“This is not about reproductive rights or care for miscarriages or IVF or anything else,” said Onder, the GOP nominee for Missouri’s 3rd Congressional District seat. “Missourians will learn that out-of-state special interests and dark money from out of state is lying to them and they will reject this amendment.”Quade said earlier this month that Missourians of all political ideologies are ready to roll back the state’s abortion ban.“Regardless of political party, we hear from folks who are tired of politicians being in their doctor’s offices,” Quade said. “They want politicians to mind their own business. So this is going to excite folks all across the political spectrum.”

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Democrat Mark Osmack makes his case for Missouri treasurer

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Mark Osmack has been out of the electoral fray for awhile, but he never completely abandoned his passion for Missouri politics.Osmack, a Valley Park native and U.S. Army veteran, previously ran for Missouri’s 2nd Congressional District seat and for state Senate. Now he’s the Democratic nominee for state treasurer after receiving a phone call from Missouri Democratic Party Chairman Russ Carnahan asking him to run.“There’s a lot of decision making and processing and evaluation that goes into it, which is something I am very passionate and interested in,” Osmack said this week on an episode of Politically Speaking.Osmack is squaring off against state Treasurer Vivek Malek, who was able to easily win a crowded GOP primary against several veteran lawmakers including House Budget Chairman Cody Smith and state Sen. Andrew Koenig.While Malek was able to attract big donations to his political action committee and pour his own money into the campaign, Osmack isn’t worried that he won’t be able to compete in November. Since Malek was appointed to his post, Osmack contends he hasn’t proven that he’s a formidable opponent in a general election.“His actions and his decision making so far in his roughly two year tenure in that office have been questionable,” Osmack said.Among other things, Osmack was critical of Malek for placing unclaimed property notices on video gaming machines which are usually found in gas stations or convenience stores. The legality of the machines has been questioned for some time.As Malek explained on his own episode of Politically Speaking, he wanted to make sure the unclaimed property program was as widely advertised as possible. But he acknowledged it was a mistake to put the decals close to the machines and ultimately decided to remove them.Osmack said: “This doesn’t even pass the common sense sniff test of, ‘Hey, should I put state stickers claiming you might have a billion dollars on a gambling machine that is not registered with the state of Missouri?’ If we’re gonna give kudos for him acknowledging the wrong thing, it never should have been done in the first place.”Osmack’s platform includes supporting programs providing school meals using Missouri agriculture products and making child care more accessible for the working class.He said the fact that Missouri has such a large surplus shows that it’s possible to create programs to make child care within reach for parents.“It is quite audacious for [Republicans] to brag about $8 billion, with a B, dollars in state surplus, while we offer next to no social services to include pre-K, daycare, or child care,” Osmack said.Here’s are some other topics Osmack discussed on the show:How he would handle managing the state’s pension systems and approving low-income housing tax credits. The state treasurer’s office is on boards overseeing both of those programs.Malek’s decision to cut off investments from Chinese companies. Osmack said that Missouri needs to be cautious about abandoning China as a business partner, especially since they’re a major consumer of the state’s agriculture products. “There’s a way to make this work where we are not supporting communist nations to the detriment of the United States or our allies, while also maintaining strong economic ties that benefit Missouri farmers,” he said.What it was like to witness the skirmish at the Missouri State Fair between U.S. Sen. Josh Hawley and Democratic challenger Lucas Kunce.Whether Kunce can get the support of influential groups like the Democratic Senatorial Campaign Committee, which often channels money and staff to states with competitive Senate elections.

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As Illinois receives praise for its cannabis equity efforts, stakeholders work on system’s flaws

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Medical marijuana patients can now purchase cannabis grown by small businesses as part of their allotment, Illinois’ top cannabis regulator said, but smaller, newly licensed cannabis growers are still seeking greater access to the state’s medical marijuana customers.Illinois legalized medicinal marijuana beginning in 2014, then legalized it for recreational use in 2020. While the 2020 law legalized cannabis use for any adult age 21 or older, it did not expand licensing for medical dispensaries.Patients can purchase marijuana as part of the medical cannabis program at dual-purpose dispensaries, which are licensed to serve both medical and recreational customers. But dual-purpose dispensaries are greatly outnumbered by dispensaries only licensed to sell recreationally, and there are no medical-only dispensaries in the state.As another part of the adult-use legalization law, lawmakers created a “craft grow” license category that was designed to give more opportunities to Illinoisans hoping to legally grow and sell marijuana. The smaller-scale grow operations were part of the 2020 law’s efforts to diversify the cannabis industry in Illinois.Prior to that, all cultivation centers in Illinois were large-scale operations dominated by large multi-state operators. The existing cultivators, mostly in operation since 2014, were allowed to grow recreational cannabis beginning in 2019.Until recently, dual-purpose dispensaries have been unsure as to whether craft-grown products, made by social equity licensees — those who have lived in a disproportionately impacted area or have been historically impacted by the war on drugs — can be sold medicinally as part of a patient’s medical allotment.Erin Johnson, the state’s cannabis regulation oversight officer, told Capitol News Illinois last month that her office has “been telling dispensaries, as they have been asking us” they can now sell craft-grown products to medical patients.“There was just a track and trace issue on our end, but never anything statutorily,” she said.

Dilpreet Raju

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Capitol News IllinoisThe graphic shows how cannabis grown in Illinois gets from cultivation centers to customers.

No notice has been posted, but Johnson’s verbal guidance comes almost two years after the first craft grow business went online in Illinois.It allows roughly 150,000 medical patients, who dispensary owners say are the most consistent purchasers of marijuana, to buy products made by social equity businesses without paying recreational taxes. However — even as more dispensaries open — the number available to medical patients has not increased since 2018, something the Cannabis Regulation Oversight Office “desperately” wants to see changed. Johnson said Illinois is a limited license state, meaning “there are caps on everything” to help control the relatively new market.Berwyn Thompkins, who operates two cannabis businesses, said the rules limited options for patients and small businesses.“It’s about access,” Thompkins said. “Why wouldn’t we want all the patients — which the (adult-use) program was initially built around — why wouldn’t we want them to have access? They should have access to any dispensary.”Customers with a medical marijuana card pay a 1% tax on all marijuana products, whereas recreational customers pay retail taxes between roughly 20 and 40% on a given cannabis product, when accounting for local taxes.While Illinois has received praise for its equity-focused cannabis law, including through an independent study that showed more people of color own cannabis licenses than in any other state, some industry operators say they’ve experienced many unnecessary hurdles getting their businesses up and running.The state, in fact, announced last month that it had opened its 100th social equity dispensary.But Steve Olson, purchasing manager at a pair of dispensaries (including one dual-purpose dispensary) near Rockford, said small specialty license holders have been left in the lurch since the first craft grower opened in October 2022.“You would think that this would be something they’re (the government) trying to help out these social equity companies with, but they’re putting handcuffs on them in so many different spots,” he said. “One of them being this medical thing.”Olson said he contacted state agencies, including the Department of Financial and Professional Regulation, months ago about whether craft products can be sold to medical patients at their retail tax rate, but only heard one response: “They all say it was an oversight.”This potentially hurt social equity companies because they sell wholesale to dispensaries and may have been missing out on a consistent customer base through those medical dispensaries.Olson said the state’s attempts to provide licensees with a path to a successful business over the years, such as with corrective lotteries that granted more social equity licenses, have come up short.“It’s like they almost set up the social equity thing to fail so the big guys could come in and swoop up all these licenses,” Olson said. “I hate to feel like that but, if you look at it, it’s pretty black and white.”Olson said craft companies benefit from any type of retail sale.“If we sell it to medical patients or not, it’s a matter of, ‘Are we collecting the proper taxes?’ That’s all it is,” he said.State revenue from cannabis taxes, licensing costs and other fees goes into the Cannabis Regulation Fund, which is used to fund a host of programs, including cannabis offense expungement, the general revenue fund, and the R3 campaign aiming to uplift disinvested communities.For fiscal year 2024, nearly $256 million was paid out from Cannabis Regulation Fund for related initiatives, which includes almost $89 million transferred to the state’s general revenue fund and more than $20 million distributed to local governments, according to the Illinois Department of Revenue.Medical access still limitedThe state’s 55 medical dispensaries that predate the 2020 legalization law, mostly owned by publicly traded multistate operators that had been operating in Illinois since 2014 under the state’s medical marijuana program, were automatically granted a right to licenses to sell recreationally in January 2020. That gave them a dual-purpose license that no new entrants into the market can receive under current law.Since expanding their clientele in 2020, Illinois dispensaries have sold more than $6 billion worth of cannabis products through recreational transactions alone.Nearly two-thirds of dispensaries licensed to sell to medical patients are in the northeast counties of Cook, DuPage, Kane, Lake and Will. Dual-purpose dispensaries only represent about 20 percent of the state’s dispensaries.While the state began offering recreational dispensary licenses since the adult-use legalization law passed, it has not granted a new medical dispensary license since 2018. That has allowed the established players to continue to corner the market on the state’s nearly 150,000 medical marijuana patients.But social equity licensees and advocates say there are more ways to level the playing field, including expanding access to medical sales.Johnson, who became the state’s top cannabis regulator in late 2022, expressed hope for movement during the fall veto session on House Bill 2911, which would expand medical access to all Illinois dispensaries.“We would like every single dispensary in Illinois to be able to serve medical patients,” Johnson said. “It’s something that medical patients have been asking for, for years.”Johnson said the bill would benefit patients and small businesses.“It’s something we desperately want to happen as a state system, because we want to make sure that medical patients are able to easily access what they need,” she said. “We also think it’s good for our social equity dispensaries, as they’re opening, to be able to serve medical patients.”Rep. Bob Morgan, D-Deerfield, who was the first statewide project coordinator for Illinois’ medical cannabis program prior to joining the legislature, wrote in an email to Capitol News Illinois that the state needs to be doing more for its patients.“Illinois is failing the state’s 150,000 medical cannabis patients with debilitating conditions. Too many are still denied the patient protections they deserve, including access to their medicine,” Morgan wrote, adding he would continue to work with stakeholders on further legislation.Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to hundreds of newspapers, radio and TV stations statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, along with major contributions from the Illinois Broadcasters Foundation and Southern Illinois Editorial Association.

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