Missouri Tax Credits on the Chopping Block
JEFFERSON CITY, Mo. (KMOX) - The Senate Ways and Means Committee considered legislation Thursday to scale back Missouri’s tax credits, after the issue derailed September’s Special Session.
Four bills were presented to the committee that would pare down tax credits in Missouri. Supporters of tax credit reduction said their measures would save the state money and free up revenue for other programs. In 2013, the state is expected to redeem $685 million in tax credits.
During last year’s special session, changes to the state’s tax credits failed to pass as the House and Senate could not agree on the program’s sunsets, or expiration dates for programs unless the legislature reauthorizes them. Sen. Will Kraus, R-Jackson County, sponsored one of the bills heard Thursday.
Kraus’s bill would eliminate certain tax credits and apply the savings from the programs to lower the corporate income tax rate. Kraus said he hoped their would be enough additional revenue to get rid of the corporate income tax all together.
“This would make Missouri a much more business friendly place for businesses to come. It eliminates the picking of winners and losers by different tax credits,” Kraus said.
The measure would lower the low-income housing and historic preservation tax credits to 25 percent of their current value by 2016. The low-income housing credit costs the state $60 million a year, while the historic preservation costs $140 million.
Opponents argued the elimination of the tax credits would cause harm to people who rely on affordable housing.
Deputy Director of the Northeast Community Action Corporation Carla Potts spoke against eliminating the program.
“It provides people a safe place to live. It provides them a place where their children can come home at night and do their homework in peace and quiet. These working families pay taxes and are vital parts of our communities,” Potts said.
Sen. John Lamping, R-St. Louis County, sponsored a similar bill and said eliminating the tax credits were not about hurting people, but about finding another solution.
“The war on poverty has been lost, this effort to eradicate through government programs is a failure,” Lamping said.
Sen. Maria Chappelle-Nadal, D-St. Louis County, took offense to Lamping’s remarks.
“I am kind of at a loss for words right now. The first bill that we passed last year was corporate welfare … that is money that could have helped people who are vulnerable,” she said.
Other bills presented were sponsored by Sen. Luann Ridgeway, R-Smithville, and Sen. Chuck Purgason, R-Caulfield.
The Ways and Means Committee took no action on the bills Thursday.
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