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Missouri treasurer harshly criticizes Illinois in message to Missouri Legislature

St. Louis Post Dispatch

Wednesday, July 12, 2017  |  Article  |   By Allison Colburn

Budget--State (8) , Legislature (56) , Taxes, income (86) Cullerton, John--State Senate, 6
ST. LOUIS • It is unusual for an elected representative of one state to hold an event about another state’s problems, but at a Tuesday news conference, Illinois was the target of the Missouri Treasurer Eric Schmitt’s criticism.

His main message to the public and the Missouri Legislature?

“Don’t be like Illinois.”

Last week the Illinois Legislature passed a $36 billion spending plan — its first in two years — and a $5 billion tax increase, raising the flat personal income tax rate from 3.75 percent to 4.95 percent.

Standing at a pavilion on the Mississippi riverfront, near the Martin Luther King Bridge leading to Illinois, Schmitt focused Tuesday on where Illinois went wrong, and what Missouri should do to prevent its own fiscal crisis.

Schmitt criticized the Illinois Legislature for passing an income tax increase without addressing the structural issues that caused the state’s fiscal crisis — namely, the state’s pension liabilities, credit rating and “decades of government expansion.”

“The past few months have been a tale of two states,” Schmitt said. “On that side of the river, they’re raising taxes, getting credit downgrades and losing business. On this side of the river, tax relief is on its way, our budget is balanced and our fiscal house is in order.”

To avoid fiscal problems in Missouri, Schmitt said the Legislature needs to come up with a long-term plan to reduce the state’s $15 billion total unfunded pension liability. He also stressed the importance of protecting Missouri’s AAA credit rating, and touted his office’s work in doing so since he started his term.

He said Missouri needs to reduce taxes on businesses and families. He pointed to Illinois’ decision to increase taxes as a quick fix — one that hurts small business and middle-class workers.

Contacted for a response, John Patterson, spokesman for the president of the Illinois Senate, said that even with the recent tax hike, Illinois still has a lower income tax rate than Missouri’s.

“He’ll be paying 7 percent along the riverfront there in St. Louis,” Patterson said. “Across the river, the rate plummets to 4.95 percent. So, I can see where he’d be upset about taxes in Missouri.”

Missouri’s income tax rate is 5.9 percent, but the city’s rate nudges 7 percent when including the 1 percent earnings tax.

Schmitt was recently mentioned as a potential entrant into next year’s race for U.S. Sen. Claire McCaskill’s seat. When asked if he would run for the office, Schmitt said he appreciates the encouragement he has received, but he plans to focus on his current job.