Charities oppose Gov. Jay Nixon's proposed caps on tax credits

Tuesday, May 11, 2010

JEFFERSON CITY, Mo. -- Charities that benefit from state tax credits united Monday against attempts by Gov. Jay Nixon and some lawmakers to limit the tax incentives offered by Missouri.

With a week remaining in Missouri's legislative session, the Democratic governor and some Republican senators hope to sharply reduce the amount of annual tax credits authorized by the state and bring in more money for education and other government programs.

Representatives of pregnancy crisis centers, children's agencies, domestic violence shelters and Catholic charities teamed up Monday to tout the benefits of tax breaks for benevolent organizations.

Missouri offers tax credits equal to 50 percent of the contributions made to maternity homes, pregnancy resource centers, domestic violence shelters and food pantries.

Unlike a tax deduction, which reduces the amount of income that's taxed, a tax credit reduces the amount of taxes owed. A 50 percent tax credit for a charitable contribution can allow donors to double the amount they otherwise would give.

"These tax credits do leverage funds to raise many more times those dollars in local communities," said Cindi Boston, CEO of the Pregnancy Care Center in Springfield.

Others suggested it was a poor time to cut state incentives for charitable groups, since some social services are already receiving less money from the state.

"Messing with this would in fact be a destimulus program," said Pat Dougherty, a former state senator.

Charitable tax credits made up a small percentage of the $585 million of state income tax credits redeemed in Missouri last year. The programs creating tax credits for maternity homes, pregnancy resource centers, domestic violence shelters and food pantries are already capped at $2 million each per year.

Nixon hasn't targeted charitable tax credits specifically but has said the size and scope of Missouri's tax credits have grown too large and are sapping money that could go to public schools, colleges and universities. Dozens of education officials joined him at a Capitol news conference last month.

In March, Nixon's administration proposed reorganizing the state's roughly 60 tax credit programs into six general categories and capping certain tax credits at $314 million per year.

Some Republican senators have been pushing for two years to overhaul Missouri's approach to tax credits. One of their proposals would give greater authority to legislative budget writers to determine how much to allot to each program.

Last week, Sen. Brad Lager, R-Savannah, distributed what he described as a revised proposal from Nixon's administration. It would make 49 of the existing tax credit programs subject to an annual allocation by lawmakers and limit their total to $370 million a year.

Republican House leaders have defended tax credits as good economic development tools and have denounced efforts to sharply curtail them.

Rep. Shane Schoeller, R-Willard, who organized Monday's news conference with the charities, said he wants to delay any changes to Missouri's tax credit system for at least a year so it can be studied further.

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