Amendment 7: A Savings Fund to Retire State Taxes

This is the fourth post in my plain-words series on Missouri's November 3 ballot. Amendment 7 came from the General Assembly. It's about the long game: whether Missouri should start saving now so that someday the earnings, not our paychecks and purchases, pay for state government.

What It Would Do

First, what it doesn't do. It doesn't cut your taxes this year, and it doesn't raise them. The official summary says it has no immediate impact on taxes. What it does is create a permanent savings fund, the Show-Me Prosperity Fund. It's filled by legislative appropriations, gifts, grants and bequests, and the State Treasurer invests it in index funds that track the S&P 500, under the normal rules for public money.

• The savings stay put. The legislature can't spend the principal, borrow against it, or pledge it.
• Only the earnings. Money can be drawn only after the Treasurer reports that the fund's earnings are enough to replace the listed state taxes, and the General Assembly approves that report.
• A 3% cap. No more than 3% of the fund's five-year average value can be drawn in any year, and only to eliminate taxes.
• The order. Taxes come off personal income first, then sales and use, then corporate income, then other state taxes in an order set by law.
• No coming back. Once those taxes are gone, they can't be brought back unless the fund fails.
• If it fails. The legislature keeps full power to fund the state and raise revenue if needed. Things continue as they are today.
• Watched closely. The State Auditor reviews the fund at least every three years, and its balance and performance are posted online at least quarterly.

What a No Vote Leaves in Place

A No means no fund is created, and Missouri keeps funding state government entirely through taxes as it does now.

What Critics Say

Some fiscal conservatives argue the better path is simply cutting spending now so taxes can come down sooner. I agree we should cut spending too. These aren't either-or.

My Recommendation: YES

The sponsor described a goal measured in decades, not next year. Honestly, most of us won't live to see it. But planting trees whose shade you'll never sit in is how good families and good states think. The guardrails are written right into it: the principal is locked, draws are capped, and the books are audited and public.

Lower taxes and limited government are worth working toward, even if the payoff belongs to our grandchildren. A government that lives on its savings instead of its citizens' earnings is a goal worth starting.

Next in the series (Sat., Oct. 24): Amendment 8, and keeping the sheriff the people elect.