At a time when our economy is showing some signs of life but our unemployment rate remains high, it is imperative that the legislature does what it can to help stimulate job growth. While it’s not possible for government to solve every problem, it is important that government is not creating additional barriers for the many Missourians who own and operate small businesses. That was the focal point of HB 45, a small business tax relief plan that became the first bill to pass out of the House this session.
HB 45, referred to as the “Big Government Get Off My Back Act” places a moratorium on fees and regulations that adversely impact small business owners. The bill would require state lawmakers to approve any federal mandates before they are implemented in Missouri to prevent costly regulations that inhibit the ability of small businesses to thrive at a time when we desperately need them.
Another vital part of the bill is aimed directly at promoting job growth. It would provide a $10,000 state income tax deduction for each new full-time job created. To qualify, the jobs would have to be good-paying jobs that at least match the county’s average wage. And for businesses that also pay half of the health insurance premiums for new workers, the deduction would double. We estimate the plan would provide a tax break of $600 to $1,200 for each job created. This bill is certainly not the total answer to fixing the unemployment issue in our state but is the first of many that will attempt to clear the way for business growth. There are well over 100,000 small businesses in our state and employees in those businesses account for 60% of employment.
Also this week we had the honor of listening to Governor Jay Nixon deliver his annual State of the State Address. The governor delivers this speech each year early on in session to give us a clear picture of his budget priorities for the next fiscal year. As we know, our budget picture has been grim in recent years and this year will be similar as we are faced with at least $500 million in cuts in order to bring the budget into balance. The $23.2 billion budget proposed by Gov. Nixon this week contains approximately $300 million in reductions in various programs.
As an educator and a member of the budget committee, I listened with great interest as our governor outlined his spending plan for both higher education and elementary and secondary education. His plan calls for approximately $53.6 million in cuts to our 4 year colleges and universities and $10.2 million in cuts to community and technical colleges. While this 7% cut will place added burden on our institutions of higher education, it is somewhat less of a cut than many expected and will hopefully be manageable as these institutions continue to examine ways to become more efficient in their operations.
The governor called for the budget for elementary and secondary education to remain at its current level. However, in a somewhat deceiving accounting procedure, he has proposed that we use a portion of the $189 million in federal funds disbursed to schools for this current fiscal year for the next fiscal year. He plans to ask schools to hold back $112 million to apply to the 2012 budget. We will spend the next several weeks examining all of these numbers and looking for the best way to spend the dollars available.
If you have questions, you may reach me at my Capitol number 573-751-9465, at the local district number, 660-582-4014, by email at mike.thomson@house.mo.gov or by mail at Room 401B State Capitol Building, Jefferson City, MO 65101
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