Missouri Hikes Taxes $160 Million To Finance Refunds to Pensioners

Article Tools
  • PrintPrinter-Friendly
  • EmailEmail Article
  • ReprintReprints
  • CommentsComments

Missouri's governor has signed legislation raising state taxes by $160 million to finance income-tax refunds owed to federal retirees.

Missouri is one of an estimated 27 states affected by a U.S. Supreme Court ruling last March that states must tax the pensions of federal, state, and local retirees on an equal basis. Tax experts have estimated that the ruling could potentially drain billions of dollars from state treasuries, threatening education and other state services.

Arizona, Virginia, and West Virginia have already taken steps to equalize taxes between federal and state pensioners. In Georgia, lawmakers are planning a special session to consider a proposal to begin taxing the pensions of retired state workers and teachers.

The Supreme Court decision did not specify whether federal retirees who paid income taxes on their pensions are entitled to refunds. The Court could clarify the issue after it hears arguments this fall in two cases involving state highway and beverage taxes.

Suits Filed

Meanwhile, federal retirees in nearly all of the affected states have filed suits seeking such refunds, ac4cording to Corina Eckl, senior staff associate with the National Conference of State Legislatures.

Thus far, Missouri is the only state that has been required to provide refunds. Rulings by the state attorney general and supreme court to that effect forced Gov. John Ashcroft to call the special session to raise taxes.

The increase in Missouri's sales and corporate-income taxes will stave off budget cuts that could have reduced funding for education and other agencies, state officials said.

The state may soon face a new lawsuit, however, by private-sector retirees who argue that the High Court ruling also entitles them to income-tax refunds.

Shortly after the Missouri Supreme Court's ruling on federal retirees, members of the International Brotherhood of Teamsters filed a request for refunds from the state. Duane Benton, Missouri's revenue director, said the request was denied and that the state expects to be sued by the union.

"It's our position there is no legal basis for the claim by private pensioners," said Mr. Benton, who estimated that the cost of refunds for private-sector retirees could range between $210 million and $350 million.--nm

Vol. 08, Issue 40

Notice: We recently upgraded our comments. (Learn more here.) If you are logged in as a subscriber or registered user and already have a Display Name on edweek.org, you can post comments. If you do not already have a Display Name, please create one here.
Ground Rules for Posting
We encourage lively debate, but please be respectful of others. Profanity and personal attacks are prohibited. By commenting, you are agreeing to abide by our user agreement.
All comments are public.

Back to Top Back to Top

Most Popular Stories





Sponsor Insights

Free Ebook: How to Implement a Coding Program in Schools

Successful Intervention Builds Student Success

Effective Ways to Support Students with Dyslexia

Stop cobbling together your EdTech

Integrate Science and ELA with Informational Text

Can self-efficacy impact growth for ELLs?

Disruptive Tech Integration for Meaningful Learning

Building Community for Social Good

5 Resources on the Power of Interoperability from Unified Edtech

New campaign for UN World Teachers Day

5 Game-Changers in Today’s Digital Learning Platforms

Hiding in Plain Sight - 7 Common Signs of Dyslexia in the Classroom

The research: Reading Benchmark Assessments

Shifting Mindsets: A Guide for Training Paraeducators to Think Differently About Challenging Behavior

All Students Are Language Learners: The Imagine Learning Language Advantage™

Shifting Mindsets: A Guide for Training Paraeducators to Think Differently About Challenging Behavior

How to Support All Students with Equitable Pathways

2019 K-12 Digital Content Report

3-D Learning & Assessment for K–5 Science

Climate Change, LGBTQ Issues, Politics & Race: Instructional Materials for Teaching Complex Topics

Closing the Science Achievement Gap

Evidence-based Coaching: Key Driver(s) of Scalable Improvement District-Wide

Advancing Literacy with Large Print

Research Sheds New Light on the Reading Brain

Tips for Supporting English Learners Through Personalized Approaches

Response to Intervention Centered on Student Learning

The Nonnegotiable Attributes of Effective Feedback

SEE MORE Insights >