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Tax Cut Approved

February 02, 1996
By: Elizabeth McKinley
State Capital Bureau

JEFFERSON CITY - Missourians are one step closer to a 1/4 percent sales tax cut proposed by Gov. Carnahan. The bill flew through the House Ways and Means- putting it in position for early House action.

Representatives from the Governor's office said they hoped citizens would be paying fewer taxes by April 1, 1996. The reason -- the state's booming economy and the Hancock lid.

Due to an excess of state revenue, Missourians could be paying 1/4 percent less in sales taxes if the governor has his way.

In a House committee meeting on Tuesday, Gov. Mel Carnahan's representatives said Missourians should be paying 1/4 percent less by April 1, 1996.

The state's economy has been booming, which has legislators worrying whether the state's revenues will be greater than what is allowed by the Hancock lid.

Instead of paying taxes and the state then redistributing the excesses back to the people, legislators, such as Rep. Ken Jacob, D-Columbia, endorse cutting the taxes Missourians pay at the register.

"In order to have a more balanced tax structure, in my opinion, we need this," said Jacob, chairman of the House Ways and Means Committee who sponsored the bill that would cut sales taxes by 1/4 percent.

Jacob said by the next fiscal year, the general sales tax cut would reduce revenue by $25 million. Mark Ward, state budget director, estimated that by 1999, revenue would be reduced by $164 million.

"How much risk do you wanna take in going over this limit?" Ward asked.

Ward said the proposal would

"We guarantee every dime of the tax cut goes to Missourians," said Brad Ketrick, from the governor's office.

The proposed tax cut would treat private pensions the same as government pensions, increase the dependent deduction and reduce the sales tax on food by a percentage point.

But another bill, heard by the committee, would completely eliminate a statewide tax on all food items. Food items would include those payable for by foodstamps.

And every Missourian, regardless of income, would receive the tax exemption, said Rep. Rich Chrismer, R-St. Louis County.

"This is the best we can do for people of Missouri in this climate of additional revenue," Chrismer said.

Even if legislators decided to eliminate a state wide tax on food, there would still be a local tax.

Sharon Feltman, director of Hunger Task Force for Missouri Association for Social Welfare, said the tax exemption could help working families and those using emergency food pantries. She estimated the state tax exemption would provide two to four weeks of groceries.

But, retailers might bear the cost, said David Overfelt, Missouri Retailer's Association.

He said the scanning system's in stores would have to be updated, which could cost alot.

"We would possibly have to totally replace every cash register in the place," Overfelt said.