It was not just a historic election—

It was an epic defeat for two constitutional amendments proposed by a legislature that is two-thirds Republican.

Missouri voters rejected amendments four and five by rates unseen in more than a century. The results for the income tax elimination amendment passed only in Cape Girardeau County and according to the New York Times just before midnight last night failed in one county, Shannon, 92-8 percent and failed in Maries County 90-10.

The las time a proposed constitutional amendment failed as badly as these two did was a ten cent gas tax increase in 1918 that got less than twelve percent support.

Here’s a simple explanation for the failure of Amendment 5, the income tax destruction amendment—and some observations about a flawed state fiscal policy:

The people who can’t afford more sales taxes defeated the people who don’t want to pay income taxes.

For folks to whom an income tax cut would be of relatively minor value while increased sales taxes would be a major blow, the defeat of the effort to excuse those to whom sales taxes are a minor thing from paying income taxes is a major victory, a crushing rejection of the legislature’s proposals.

We hope our lawmakers and/or the candidates to become lawmakers understand a sorry message:

The people at large do not trust them, at least not in matters of tax policy.

How will it play out in candidate elections in November? Incumbent Republicans might face intense demands to explain why they supported both of these amendment, especially Amendment 5.

Here’s a different approach that supporters of Amendment 5 might think about next:

Eliminate the sales tax.  Restructure the income tax so it spreads the fiscal responsibility for state finances more equitably across income levels but gives the folks on the margins some breathing room.

Governor Kehoe said one reason Amendment 5 was justified was because, “We don’t have a revenue problem. We have a spending problem.”

No.

We have both. And we’ve had them for a long time. And the thinking of the legislative majority has been for two decades that the state needs to lower its capabilities to raise money for programs and services for the people who put them in power.

Our spending problem will only increase by reducing our revenues. It would be the equivalent of solving a breathing problem through strangulation.  Fortunately, Missourians didn’t buy that irresponsible cure.

Our politics are filled with cliches, two of which are:

Government needs to be operated like a business.

You can’t cut your way to prosperity.

The Managing Editor of the Illinois Business Journal, Alan J. Ortbals observed in 2015:

Many people advocate government living within its means. Government needs to operate like a business, they say. Those who say that, however, apparently don’t know much about business…

Cost cutting alone creates a downward spiral — cuts diminish your product which reduces your sales which lead to more cuts that diminish your product and further reduce sales until you hang the “Going Out of Business” sign in the window.

Good government — like good business — requires stable revenue. Grover Norquist’s “No New Taxes” pledge is a mindless way to operate…Imagine running your business on a “No New Revenues” pledge. 

Ortbals called for a “balanced approach to government funding with a combination of revenue and cuts. You can’t do it all one way.”

He concluded, “Yes, government does need to operate like a business, which means working on both sides of the ledger to build a stable organization that can grow and prosper.”

Here is a question voters need to ask their candidates in November:  How are you going to build a stable state financial plan that encourages the state to grow and prosper?  What is your plan?

Jeremy Corbyn, a member of the House of Commons in England, put it most simply: “You grow your way to prosperity; you don’t cut your way to it.” It’s probably not an original statement because so many others have said it.

Shannon Power, a member of the Forbes Finance Council wrote in 2024, “The harsh reality is that you can’t cost-cut your way to sustainable growth.”

“The key to growth lies…in the strategic allocation of resources to areas that promise a return on investment. This requires a thorough analysis of where the company can generate growth. A go-to-market analysis of which industries are projected to grow in the coming years and/or which customers or potential customers are projected to increase spending next year is a good place to start.”

She was talking about business growth but in this case, running a government like a business has some applicability:

“The temptation to resort to short-term cost-cutting measures during uncertain times is commonplace. However, companies must recognize that sustainable growth requires strategic investments in areas that drive revenue…The key lies not in cutting costs—but in investing wisely for a prosperous future.”

Gut-touching political slogans won’t do the job. Simplistic steps that do not lift both ends of the boat are not steps toward greatness.  Only by broadening our views, and recognizing that growth begats growth can we lift Missouri from being a state ranked in the 30s and 40s to one other states can point to.

Let us hope that someday the kind of leadership emerges that makes us want to be such a state