CHICAGO - Missouri lawmakers wrapped up a busy 2014 session in which they authorized $600 million in borrowing, and sent to the ballot a sales tax hike for transportation.

Gov. Jay Nixon criticized the legislative majority late last week its passage of what he called 11th hour tax breaks for "special interests. He warned the price tag could add up to $483 million and would severely strain the budget.

"As a result of the legislature's actions today, the budget they presented to me is seriously out of balance and I will be taking the appropriate action over the coming weeks and months to ensure Missouri does not careen off its fiscally responsible course," Nixon said.

Nixon has already seen a veto of tax cut legislation overriden.

Before adjourning on Friday, the House authorized $600 million of state bonding to finance infrastructure work on state facilities and state colleges.

Lawmakers authorized $400 million of revenue bond borrowing for state facilities, including $200 million for a new mental health hospital, plus $200 million for college projects. Most of the funding is earmarked for repairs and improvements. The Senate previously approved the package.

"Bonds that may be issued due to the increase in the cap may only be used for renovation or repair of existing buildings or facilities, except that bonds may be issued for the construction of a new mental health facility in Callaway County," the legislation says. The new 300-bed maximum and intermediate security psychiatric facility would replace the aging Fulton State Hospital.

Earlier in the session, lawmakers approved sending to the November ballot a three-quarter cent sales tax increase. If voters approve it, the tax hike would take effect on Jan. 1, 2015 and is projected to generate more than $500 million annually for roads, bridges railroads, ports, airport and other transportation related projects.

It would remain in place for 10 years and could be extended with another vote. The advancement of the sales tax hike and state and college bonding package came after similar proposals stalled last year.

Lawmakers this year also passed a $26.4 billion budget and a $620 million tax cut package, dealing Gov. Jay Nixon a blow in their successful override of his veto of the tax cuts. Nixon is a Democrat and Republicans control the Legislature.

Nixon slammed the action and warned that the tax cuts, which would be phased in as soon as 2017, would hurt public education and could damage the state's gilt-edged ratings. The General Assembly last year, due to some GOP opposition, failed to override a Nixon veto of a similar tax cut package that carried a higher price tag and more complex features. The package approved this year was smaller and had the support of all Republicans.

The legislation would gradually cut the state's top individual income tax rate to 5.5 % from 6% and phase in a 25% cut for business income. Republicans estimate the total annual cost once all pieces are phased in to be $620 million.

The tax cut would only begin to be phased in starting in 2017 if revenue collections rise by a minimum of $150 million annually from a high benchmark over the previous three years. Republicans have touted the trigger as a protective measure against damage to the state's fiscal foundation.

Nixon had more favorable following passage of the budget earlier this month as lawmakers included his proposals to freeze tuition at public universities and fund the new state mental health facility but he failed to persuade lawmakers to expand Medicaid.

The budget includes funding increases for public K-12 schools - although it fell short of Nixon's recommended level -- and higher education institutions.

Nixon's administration has projected revenue growth of 5.2% in the next budget while lawmakers settled on a 4.2% rate.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.