PRO
Governor Signs Eight Pro-Growth Bills
by Governor Mike Kehoe’s Office
During a bill signing ceremony at the Missouri State Capitol, on Thursday, Governor Mike Kehoe signed two major pieces of legislation—House Bills (HB) 567 and 594—delivering on his commitment to lower taxes and defend small businesses.
"Conservative leadership is about keeping more money in the hands of Missouri families, and less in government coffers," said Governor Kehoe. "Today, we are protecting the people who make Missouri work—families, job creators, and small business owners—by cutting taxes, rolling back overreach, and eliminating costly mandates."
HB 567, sponsored by Representative Sherri Gallick and Senator Mike Bernskoetter, modifies provisions relating to employee compensation.
—Maintains the state's minimum wage law at $15 per hour, repealing the annual Consumer Price Index adjustment, and extends the wage requirement to public employers as well as private.
—Repeals onerous paid sick leave mandates on Missouri small businesses, including:
—Requirements dictating when and how paid leave must be provided.
—Burdensome record keeping and compliance obligations.
HB 594, sponsored by Representative Chad Perkins and Senator Curtis Trent, introduces or modifies provisions relating to taxation.
—Authorizes an income tax deduction for all capital gains reported for federal tax purposes by individuals in tax years beginning on or after Jan. 1, 2025.
—This tax cut will be extended to corporations once Missouri’s income tax rate falls to 4.5 percent or lower.
—Makes several modifications to the Senior Citizens Property Tax (PTC) "Circuit Breaker" Program.
—Increases the PTC for eligible taxpayers from $1,000 to $1,550 for homeowners and from $750 to $1,055 for renters, effective Jan. 1, 2026, with annual CPI adjustments moving forward.
—Exempts diapers, incontinence products, and feminine hygiene products from state and local sales and use taxes.
Governor Kehoe also signed six additional pro-growth bills aimed at securing a brighter future for Missouri, including:
—HB 516, sponsored by Representative Mark Matthiesen and Senator Nick Schroer, modifies criteria of radioactive waste investigations and allows for increased appropriations to the radioactive waste investigations fund.
—HB 754, sponsored by Representative Philip Oehlerking and Senator Sandy Crawford, modifies standards for certain financial organizations.
—SB 2, sponsored by Senator Sandy Crawford and Representative Peggy McGaugh, modifies provisions relating to financial statements of certain local governments.
—SB 3, sponsored by Senator Sandy Crawford and Representative Dave Hinman, modifies or enacts provisions relating to Department of Revenue fee offices.
—SB 98, sponsored by Senator Sandy Crawford and Representative Bill Owen, modifies various provisions relating to financial institutions.
—SB 221, sponsored by Senator Nick Schroer and Representative Ben Keathley, modifies the standard of review for agency interpretation of statutes, rules, regulations, and subregulatory documents.
CON
House Bill 594 is Shameful Giveaway
By the Missouri Budget Project
Statement from Missouri Budget Project CEO Amy Blouin
Governor Kehoe is expected to sign House Bill 594 Thursday afternoon, a tax bill that will reduce state revenue by at least half a billion dollars annually. This comes at a time when our state is already facing significant budget pressures, as well as significant cuts to federal funding in the coming years.
House Bill 594 will exempt capital gains from state income tax. Like the vast majority of states, Missouri has taxed capital gains – the profits/earnings on the sale of stocks, cryptocurrencies, real estate and other valuables – through the individual income tax structure, just like other income.
The new exemption would send hundreds of millions to Missouri’s wealthiest. 80 percent of this tax giveaway goes to the top 5 percent of Missouri taxpayers, with more than two-thirds going to the top one percent – or those with incomes averaging $1.9 million a year.
State legislators will already be facing budget shortalls in the coming years because of previously approved tax cuts that are being implemented. As announced by Governor Kehoe on June 30th, the state already faces at least a $1 billion shortfall in Fiscal Year 2027, which begins just one year from now.
Moreover, the Federal Budget Reconciliation that was passed by Congress last week will result in a disastrous blow to Missouri. Cuts at the federal level will shift more than $2 billion in health and nutrition costs to the state of Missouri per year. That means devasting budget cuts for years to come and could lead to an economic crisis.
Prioritizing an expensive special interest tax giveaway at this time is irresponsible and a mismanagement of taxpayer dollars. It’s also a slap in the face to the bulk of Missouri taxpayers who are struggling to afford groceries and who already pay a higher portion of their income in state and local taxes than do the folks who will get a windfall from the capital gains exemption.
Although we remain deeply concerned about the underlying bill, some additions made in the Senate will provide much needed assistance to older adults and Missourians with disabilities who have fixed incomes. Specifically, the bill includes updates to the Missouri property tax credit, also known as the circuit breaker tax credit.
The credit helps to offset the cost of property tax for older adults and Missourians with disabilities who have fixed incomes. However, neither income eligibility nor the amount of the credit have been updated in 17 years. As a result, fewer Missourians who need it can qualify. Those that do often receive a very small credit.
The improvements to this credit will help Missourians stay in their homes and communities. The circuit breaker improvements will help nearly 195,000 households and demonstrate the type of tax policy improvements the state legislature should prioritize.
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