HJR 174 Update: Now HCS for HJRs 173 & 174
Sponsor: Rep. Jon Patterson
Oppose
Updated for HCS HJRs 173 & 174
The current version of this proposal is now the House Committee Substitute for HJRs 173 & 174. It is still being sold as a path to eliminating Missouri’s income tax, but it does not eliminate the income tax now. Instead, it rewrites the Constitution to allow future lawmakers to expand taxes to goods and services, restructure local tax rates, and bypass key Hancock protections during implementation.
What Changed in the Substitute?
The original HJR 174 has now been replaced by the House Committee Substitute for HJRs 173 & 174. Supporters may claim this “fixes” earlier concerns, but the biggest structural problems remain.
- It is now a combined resolution. HJR 174 has been merged with HJR 173 into one substitute vehicle.
- The trigger language changed. Instead of vague future “revenue triggers,” the substitute now uses a formula tied to general revenue growth above an inflation-adjusted FY2025 baseline.
- The broad entity carve-out was removed. That appears to respond to criticism of the original version.
- The core danger remains. The substitute still overrides Missouri’s current constitutional protection against expanding taxes to services and still contains a Hancock carve-out for certain implementing legislation.
- The ballot language is still softer than the legal text. The bill text authorizes expansion to “any goods and services,” while the summary language frames this more gently as “modernizing” the tax system.
What Does This Bill Do?
- Creates a new income tax phaseout formula: The substitute ties future rate reductions to general revenue growth above an inflation-adjusted FY2025 baseline.
- Still opens the door to taxing services: It keeps the current constitutional prohibition in one subsection, then overrides it in another by allowing future legislation to expand taxes to “any goods and services.”
- Still weakens Hancock protections: It exempts certain tax or revenue increases enacted within three years from key constitutional guardrails.
- Still forces local tax adjustments: Political subdivisions would be pushed into annual rebalancing of tax sources if the tax base is expanded.
Constitutional or Critical Context
HJR 174 proposes a "bait-and-switch" on Missouri taxpayers. By offering the promise of income tax elimination, it secures a constitutional permission slip to tax services (childcare, funerals, legal services, etc.). Most dangerously, it attempts to suspend the Hancock Amendment's voter approval requirement (Section 18e) during the implementation phase, removing the people's check on tax hikes.
Red Flags & Detailed Concerns
CRITICAL: Hancock Guardrails Bypassed
The bill explicitly attempts to exempt implementing legislation from Article X §§18 and 18(e). This is a major red flag because it allows tax increases without the voter approval normally required by the Constitution.
CRITICAL: The "For the Purpose" Loophole
Article X, §26(2) allows the legislature to tax ANY service if they simply claim it is "for the purpose" of income tax reduction. This "exception swallows the rule" and creates a blank check for base expansion.
SERIOUS: Sweeping Agency Power
It grants the Department of Revenue director the power to regulate "notwithstanding any provision of this Constitution to the contrary," inviting administrative overreach and reducing legislative accountability.
Entity Tax Workaround
The "ban" only applies to individual income tax. It explicitly carves out trusts, estates, and entities, allowing politicians to shift the income tax burden to businesses and pass-throughs.
Act for Missouri Recommendation:
Act for Missouri OPPOSES HJR 174. While the goal of income tax elimination is laudable, the mechanism here creates loopholes, empowers the executive branch, and removes critical Hancock protections when they are needed most.
Why the Process Matters
The substitute version was presented to committee members less than 24 hours before the hearing. A proposed amendment that would have given voters more accurate ballot language was rejected, discussion was limited, and the public was not given an opportunity to testify on the new substitute before it was voted out.
For a proposal that would remove voter-approved constitutional protections and authorize a major tax shift, that lack of transparency should concern every Missourian.