Why our tax credit system needs more accountability
Each year in Missouri, nearly every spending program considered by the General Assembly is subject to the appropriations process. Whether it is programs dealing with education, health care, senior nutrition, higher education, agriculture or our court system, each of these spending programs receives a full review by legislators and the governor before they are appropriated funds.
The appropriations process has myriad benefits. It allows legislators to consider the merits of each program and whether the spending is justified, while also providing accountability to taxpayers by showing how their money is being spent and by which legislators.
A major exception to this rule, however, is Missouri's $500 million-plus tax credit system. Unlike other spending programs, which are reviewed in the appropriations process and kept within a budget, once a tax credit is authorized, an unlimited number of individuals can apply for it. As a result, each year when the General Assembly and governor evaluate the budget, there is no way to estimate what some tax credit programs will cost Missouri taxpayers in lost tax revenue.
This is especially problematic in the tough economic times we face now. With declining tax revenue and difficult spending decisions that need to be made, we should be able to rigorously evaluate these programs and adjust funding levels based on our current economic conditions just as we do education, health care and other vital services.
There are state senators who do not support tax credits and have demanded a cap be placed on the historic preservation tax credit program specifically as well as all others. They argue that these credits go only to millionaires, serve as little more than corporate welfare and take away funding from other vital state programs.
I do not support capping historic preservation tax credits. The current bill being debated in the Missouri Senate places a $75 million cap on historic preservation tax credits. Certainly, there are examples of tax credits being granted to folks who could afford to fix up buildings without government assistance, and I'm sure there are projects that have not benefited the state of Missouri as much as others.
As Jon Rust highlighted in his April 12 column, the owners of the Southeast Missourian have benefited from the historic preservation tax credit program. The rehabilitation of the Southeast Missourian's building has preserved a historic jewel for our city, and the taxpayer-funded assistance the owners received helped make it possible.
The criticisms and success stories I laid out above are why I believe all tax credit programs should go through the annual appropriations process along with all other state programs. Missourians deserve to know how their taxpayer dollars are being spent and that they are being spent wisely. For these reasons, I oppose Senate Bill 45 and House Bill 191 and will work to include reforms that will add more accountability to the tax credit process.
Jason Crowell of Cape Girardeau represents the 27th District in the Missouri Senate.