Talks of Tax Increases Premature

October 2, 2008 - The Missouri Budget Project has suggested the state budget is not sustainable with the current level of taxation and suggested that taxes must be increased, according to a story broadcast on KOMU-TV, Columbia, MO.

Ray McCarty, president of Associated Industries of Missouri, told KOMU's Brandon Lewis that holding the line on spending in Missouri has helped the state weather recent fiscal storms much better than other states. McCarty noted that Illinois faced budget challenges similar to those in Missouri several years ago. Illinois did not address spending and is still facing budget shortfalls and additional tax increases to fill their budget deficit. Missouri, on the other hand, took measures to reign in spending instead of tax increases and has enjoyed surplus revenues for several years.

McCarty reminded viewers that the Missouri Budget Project made dire predictions regarding the state budget in April and that TRIM had noted that the revenue shortfall was temporary due to automatic extensions of time to file income tax returnsin many counties that were ravaged by floods. When those returns were received, there was no budget crisis. See story on this subject below.

McCarty told Lewis that increasing taxes in a down economy is not the answer and that tax cuts such as the recent AIM/TRIM Manufacturing Inputs Sales Tax Exemption, have resulted in the creation of additional jobs and improved the economy in Missouri. McCarty said the position of Associated Industries of Missouri is that government must live within its means and if revenues decline, state government may need to more closely scrutinize spending. "Some expenditures may be wise uses of the taxpayers' money, but may not absolutely necessary," said McCarty. "Just as businesses tighten their spending as revenues decline, state government must do the same."

Click here for a link to the KOMU website where you may access a copy of the video.