Missouri voters will be asked on Nov. 3 whether to establish a permanent public endowment fund, the “Show-Me-Prosperity Fund,” to support state government with a goal of gradually eliminating state-imposed taxes.
A simple majority is required for passage.
The official ballot question reads,“Shall the Missouri Constitution be amended to establish a permanent public endowment fund to support state government instead of taxing Missouri residents, prohibit the General Assembly from appropriating or diverting the fund and eliminate state-imposed taxes once the fund generates sufficient revenue to replace them? State and local governmental entities estimate no costs or savings.”
The amendment is a byproduct of Senate Joint Resolution 95 and was sponsored by state Sen. Adam Schnelting, R-St. Charles. The government-owned investment fund was described by Schnelting as operating like a sovereign wealth fund and could eventually pay for state government instead of collecting state taxes.
On the Missouri Senate website, the bill summary states, “the fund shall consist of money appropriated to it by the General Assembly, and may also receive gifts, donations, grants and bequests from any source.”
The state treasurer would invest the money in exchange-traded funds tracking the stock performance of the Standard and Poor’s 500. Once of sufficient size, the state would draw down 2 to 3 percent of annual distributions, allocating them to replace revenues derived from state-imposed taxes.
Ballotpedia.org stated the fund could not be used to distribute money until its yearly investment earnings were large enough to replace the revenue currently collected through state taxes.
The amendment would require all money in the fund to be used exclusively to eliminate state taxes, including individual income taxes, state sales and use taxes, corporate income taxes and any other taxes imposed by the state. Once these taxes were eliminated, the amendment would prevent the state from bringing them back unless the fund could no longer meet its financial obligations.
A “yes” vote on Amendment 7 would approve the creation of the Show-Me Prosperity Fund; however, the fund would not immediately eliminate state taxes.
The bill summary also mentions that Missouri would still collect existing state taxes, and taxes would be eliminated if the fund over time became large enough that its investment earnings could replace the revenue from state-imposed taxes.
Schnelting shared on his social media account that he proposed the amendment so that instead of taxing Missouri residents repeatedly and operating out of a consumer mindset Missouri could move to an investor mindset and invest its way out of taxation. He also mentioned that passing this amendment would not only benefit the Missourians here and now, but the plan will benefit the successive generations of Missourians as well.
“Reimagining how we fund government operations will unleash the ingenuity and innovation of Missourians and spur never-before-seen economic growth. It’s not merely about finding a new revenue source; it’s about finding a whole new model of revenue generation,” he posted.
Opponents of the amendment include the Missouri Retired Teachers Association (MRTA), an IRS-approved public charity and tax-exempt 501(c)(3) organization, which is the largest retiree association in the state.
According to the organization’s social media posts, its main concern regarding the approval of Amendment 7 is how funding will be treated once the Show-Me Prosperity Fund is in effect, as MRTA said there is no guarantee that the fund will generate money and Missourians’ tax dollars are at risk.
“Missouri already has an obligation to adequately fund our public schools, transportation and the services Missourians depend on. We believe taxpayer dollars should be used responsibly to meet those commitments, not locked away in a massive new fund built around the ‘hope’ of future investment returns. Our schools need investment now. Our communities need reliable funding now,” the MRTA Facebook post stated.
