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Missouri Senate Endorses Elimination of Tax Credit for Renters

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Getty/Justin Sullivan

Getty/Justin Sullivan

Election Returns

JEFFERSON CITY, Mo. (MDN) – The Missouri Senate has endorsed a plan to roll back a tax credit provided to low-income renters.

The Senate backed a bill sponsored by Sen. Tom Dempsey, R-St.Charles, to eliminate a tax break known as the “Circuit Breaker” tax credit. The credit is used by lower-income senior citizens and disabled persons to provide property tax relief. Dempsey’s legislation would eliminate the program altogether for renters and use the savings to pay more to Medicaid providers.

Critics charged it was unfair to deny to renters a tax break provided to low-income home owners.

Sen. Kiki Curls, D-Kansas City, said many low-income seniors depend on the rebate to pay for necessities each year. However, Dempsey said the state can make a more efficient use of the funds to help seniors.

“Don’t you think the cost of the property tax is buried in the rent,” asked Sen. Rob Schaaf, St. Joseph.

Dempsey responded that the property tax is part of the landlord’s cost of doing business. He described the bill has part of a broader plan designed to reduce tax credits provided to various categories of persons, activities and developers.

Gov. Jay Nixon included elimination of the program in his 2013 State of the State address, and his appointed Tax Credit Review Commission recommended that the program be eliminated in its 2010 and 2012 reports.

Legislative staff estimate elimination of the tax credit for lower income renters would free $57 million per year. Under the bill, that money would be transferred to programs for the elderly.

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