• Publications
    • Essay
    • Case Study
    • Policy Study
    • Report
    • Testimony
    • Other
    • Newsletter
  • Blog
    • Daily Blog
    • Podcasts and Radio
    • Video
    • Infographics
    • Commentary / Op-Eds
    • Events
  • Events
  • Donate
  • About
    • Our Team
    • Show-Me Institute Board of Directors
    • Fellows and Scholars
    • Our Authors
    • Jobs
  • Contact
  • Explore Topics
    • Education
      • Accountability
      • Education Finance
      • Performance
      • School Choice
    • Health Care
      • Free-Market Reform
      • Medicaid
    • Corporate Welfare
      • Special Taxing Districts
      • Subsidies
      • Tax Credits
    • Labor
      • Government Unions
      • Public Pensions
    • State and Local Government
      • Budget and Spending
      • Courts
      • Criminal Justice
      • Municipal Policy
      • Property Rights
      • Transparency
      • Transportation
    • Economy
      • Business Climate
      • Energy
      • Minimum Wage
      • Privatization
      • Regulation
      • Taxes
      • Welfare
      • Workforce
Show Me InstituteShow Me Institute
Show Me InstituteShow Me Institute
Support the Show-Me Institute
  • Publications
    • Essay
    • Case Study
    • Policy Study
    • Report
    • Testimony
    • Other
    • Newsletter
  • Blog
    • Daily Blog
    • Podcasts and Radio
    • Video
    • Infographics
    • Commentary / Op-Eds
    • Events
  • Events
  • Donate
  • About
    • Our Team
    • Show-Me Institute Board of Directors
    • Fellows and Scholars
    • Our Authors
    • Jobs
  • Contact
  • Explore Topics
    • Education
      • Accountability
      • Education Finance
      • Performance
      • School Choice
    • Health Care
      • Free-Market Reform
      • Medicaid
    • Corporate Welfare
      • Special Taxing Districts
      • Subsidies
      • Tax Credits
    • Labor
      • Government Unions
      • Public Pensions
    • State and Local Government
      • Budget and Spending
      • Courts
      • Criminal Justice
      • Municipal Policy
      • Property Rights
      • Transparency
      • Transportation
    • Economy
      • Business Climate
      • Energy
      • Minimum Wage
      • Privatization
      • Regulation
      • Taxes
      • Welfare
      • Workforce
State and Local Government / Transparency

Something for Which Our Governor and Legislature Deserve a Lot of Credit

By David Stokes on Jul 15, 2008

The economic health of state government is good — maybe even too good. The Kansas City Star has a story about the state’s substantial budget surplus. Gov. Blunt and the General Assembly deserve a lot of credit for this. They don’t deserve credit for creating a good economy; the people of Missouri do that (although passing and signing tort reform helped greatly). But the governor and the legislature do deserve credit for holding the line on spending, to allow economic growth to overtake spending increases and grow both the state’s economy and the state budget surplus.

The size of the surplus is huge. The state begins its year with a balance of $833 million over and above the legally required reserve of $557 million. I’m no math genuis, but that equals $1.39 billion, with a “b.” The state should do two things with this surplus, and holding it back for a rainy day is only for the $557 million. The $833 million should be used for infrastructure and cutting taxes. One legislator sees that clearly:

Senate Appropriations Committee Chairman Gary Nodler said it makes sense to spend some of the surplus on one-time projects, such as building construction and maintenance and computer equipment and software.

There are also some comments in the article from cradle-to-grave socialists who give the standard talking points about not spending enough on health care and education, and that this whole surplus was built up on the backs of the poor. These are the type of people who consider dependency on the government by large segments of the population to be a good thing, rather than a bad thing.

With the $833 million, I would also recommend helping MoDOT meet the state’s transportation needs in allowable capacities (I am fully aware of the legal funding differences there). I would also cut taxes. It would be wonderful to see the state reduce its income tax from 6 percent to 5 percent, to see the effect it would have. The net effect would not be a 17-percent reduction in income tax revenues, although that would be fine with me. More money in Missouri taxpayer pocketbooks would also lead to more sales tax collections, aside from helping improve the climate for economic growth. I won’t go so far as to predict an immediate increase in tax revenues if Missouri did the above, but it would be good for taxpayers and the economy, in both the long and short terms.

An alternative idea would be to increase the extremely low amount of earnings for which income taxes kick in, the increase the level at which the highest rate (6 percent) kicks in. That would benefit everyone, but particularly the poor who would see less of their income get taxed. Of course, we could also just get rid of Missouri’s income tax entirely.

  • Share
  • Tweet
  • Share
  • Email
  • Print
About the author

David Stokes

Director of Municipal Policy

More about this author >
    Footer Logo
    Support the Show-Me-Institute
    Showmeinstitute.org is brought to you by Show-Me Institute and Show-Me Opportunity.
    • Publications
    • Blog
    • Events
    • Donate
    • About
    • Contact

    Reprint permission for Show-Me Institute publications and commentaries is hereby granted, provided that proper credit is given to the author. We request, but do not require, that those who reprint our material notify us of publication for our records: [email protected]

    Mission Statement
    Advancing liberty with responsibility by promoting market solutions for Missouri public policy.

    © Copyright 2023 All Rights Reserved