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Understanding the Everything Tax threat
| Putting crucial programs at RISK |
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To cover the $3.2 billion shortfall created by the Everything Tax, the state will have to make cuts to some or all of the following programs:
• Elementary and secondary education
• Medicaid
• Higher education programs
• Public safety
• Mental health and social services programs
• Correctional facilities
What is taxed?
The Everything Tax will force you to pay more for:
• Milk
• Bread
• Produce
• Baby food
• Diapers
• Health insurance benefits
• Emergency room visits
• In-home care costs
• Car repairs
• Most everything you buy |
By DeeAnn Aull
MNEA assistant executive director for government relations,
communications and education services
If you think Missouri spends too much on education and should make drastic cuts to K-12 and higher education, stop reading. Still here? Thought so.
What began as the “Fair Tax” is now known as the “Everything Tax,” a tax on almost everything Missouri families and seniors buy every day.
Proponents of the tax are currently touting it as an initiative petition to change taxation in the Missouri constitution. The Everything Tax would eliminate the state income tax and replace it by increasing sales tax to 10 percent on most everything you buy every day.
The sad news is the Everything Tax falls short of replacing the state income tax by billions of dollars. James R. Moody, a recognized expert and former state budget director during the Ashcroft administration, estimates the shortfall could cause as much as a 30 percent cut in the state budget at the end of the four-year phase in. Those cuts are in addition to the state’s current budget challenges.
Not surprisingly, the Everything Tax is the brainchild of billionaire Rex Sinquefield, a Missourian who lived in California for nearly 30 years. Moody says the tax would save Sinquefield and his wealthy friends millions in taxes while shifting the tax burden onto working Missourians.
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Families of Missouri’s Students
At a time when so many Missourians are struggling to make ends meet, the new Everything Tax would make things worse. Missouri families will be forced to find more room in their budgets for things like milk, bread, produce, baby food, diapers, clothing, health insurance benefits, emergency room visits, in-home nursing care costs, and car repairs, just to name a few.
Senior citizens and single parents
The Everything Tax hits senior citizens especially hard. First, Missouri law exempts most senior citizens’ pensions from income tax to begin with—so eliminating it does nothing for them. Second, seniors tend to live on a fixed income, and the Everything Tax would add a new tax on their groceries, medicine and in-home care.
The Everything Tax also hits working, single parents particularly hard since they tend to pay very little in income taxes and are solely responsible for buying groceries and providing for their families.
Missouri’s budget
In addition to making you pay more for most everything you buy, every day and being especially hard on seniors and working Missouri families, the Everything Tax makes Missouri’s already bad budget situation worse.
First of all, sales tax revenues in Missouri have decreased rather than increased over the last five years. In 2006 the state collected $1.96 billion in sales taxes. In 2011, it collected $1.76 billion, a reduction of $200 million in revenue. Tying the state’s budget to a shrinking pot of money is bad fiscal policy.
Second, and perhaps more important, creating a 10 percent sales tax in lieu of the income tax will result in massive budget cuts. According to Moody, when fully implemented in 2016, the Everything Tax will create a shortfall of $3.2 billion, slashing the state budget by nearly one-third by 2016. |
Public education
How will the state make up the difference? Cuts of course. And don’t be surprised if right near the top of the list of things to be cut are funds for elementary and secondary and higher education.
Last year educators saw a reduction of more than 3,000 classroom teaching staff statewide from the year before. That’s a loss of five percent of the state’s teachers. That resulted from bit more than $100 million shortage in the state funding formula. If the “Everything Tax” results in a loss of $500 million, the staff reductions will likely exceed 10,000, and class sizes will swell by more than 15 percent.
When students graduate, financing college will be even more difficult. They may well find that the “Everything Tax” has claimed all of the state-funded college scholarships and shut down the programs they wanted to study or perhaps even whole institutions. If legislators eliminated the entire general
revenue budget for higher education in Missouri ($834 million), the amount would only amount to half of the lower estimate for the toll the “Everything Tax” would have on state funding.
Your local community
Imagine a 25 to 30 percent decrease in state funding coming to your school district. Cuts will force school districts to make decisions resulting in even larger class sizes and reduced services to students. Educators will have to do more with less when mandates force them to reach higher student achievement levels. Many speculate that increased property taxes will be inevitable to maintain quality public schools.
In addition, because the Everything Tax also caps local sales tax rates at three percent, counties and cities across the state that have a higher local tax rate will need to cut their budgets, too. Among those counties are St. Louis, Platte, Jackson, Franklin, Lincoln, Warren and Washington. Schools count on cities and counties for services like snow removal, trash collection, street lights, sewer and water. How cities and counties could recapture the revenue lost if this proposal passes is unclear. |
 About the Coalition for Missouri’s Future
Missouri NEA’s Ballot Issue Crisis Fund provided seed money to create the Coalition for Missouri’s Future. This newly formed independent, non-partisan coalition of concerned citizens, organizations and associations is working to defeat the Everything Tax. The coalition’s first task is to try to keep the issue off the November 2012 ballot through a “Decline to Sign” campaign.
You can help
The Everything Tax effort has a billionaire’s money to spend, but MNEA members have the power of the millions of Missourians who will suffer the negative impact of this bad tax. You can help to harness the power of the people.
To place the Everything Tax on the ballot, paid workers will be trying to gather signatures from registered voters in parking lots and other public venues over the next few months. Please do not sign the petition.
Visit www.MissouriFuture.org to learn more. While you are there, sign up for the email list and, if you can, volunteer to help down the road. On the website, you can make a donation to help counter the misleading advertising the Everything Tax proponents have created. After you’re done, pass the website on to your friends, your family members and your neighbors. Get them involved, too.
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