Commission to review state tax credit programs here Monday

A special commission tasked with reviewing -- and recommending modifications to -- Missouri's 61 tax credit programs will be in Cape Girardeau on Monday to hear input from the community at two three-hour public hearings.

The 25-person advisory group is likely to hear pleas from all sides, with some saying the state's budget crisis demands that the programs undergo close scrutiny and others saying severe cuts or eliminations could hinder historic, economic and community projects.

The public hearings will be from 3 to 6 p.m. and from 7 to 10 p.m. in the Glenn Convocation Center at Southeast Missouri State University's River Campus.

In July, Nixon named the commission, made up of community and legislative leaders, to review the tax credit programs. The commission, Nixon said then, is charged with analyzing the efficacy and return on investment for each program and to recommend changes.

"The commission will perform a critical analysis to ensure taxpayers receive the greatest possible return on investment from tax credit programs and that those programs are used efficiently and effectively," Nixon said. "The work of the commission will play a vital role in reshaping the way the state uses financial incentives to achieve these important goals."

Missouri granted $585 million in tax credits through 53 programs in fiscal year 2009, according to a recent state audit that was critical of two business tax credit programs, specifically. Nixon has said tax credits are projected again to cost around $500 million this year and that he wants the figure diminished to save money in future state budgets.

Locally, it is shaping up to be a hot-button issue, just as it has been at other public hearings held throughout the state.

"It's something we're very interested in," said Marla Mills, executive director of Old Town Cape. "The historic tax credits are a tool for downtown revitalization. I understand the state's dilemma, but some of the projects we've seen absolutely would not have happened if not for the historic tax credits."

Mills named three such projects, including renovations to the Marquette Hotel, the old L.J. Schultz School and the Southeast Missourian building. A tax credit reduces the amount of income tax owed by an individual or business and functions as an incentive for certain activities -- such as business expansions, the renovation of historic buildings, low-income housing developments and contributions to food pantries and domestic violence shelters.

But two of Cape Girardeau's top economic development leaders said they are leery of how big the tax credit programs are getting.

"They need revisions," said Mitch Robinson of Cape Girardeau Area Magnet. "This will have people yell at me, but I think the historic tax credit needs a cap. They are a huge drain on the state budget. Lots of economic developers agree: We need to refocus some of these credit programs."

The state only has so many dollars to go into business incentives, he said. As tax credits continue to grow, it takes away other business incentives that are used to entice businesses to open in or relocate to Missouri, he said.

Cape Girardeau Area Chamber of Commerce president and CEO John Mehner said the 61 tax credits were established when the state could afford to pay for them.

"You can make an argument for every tax credit that's out there," he said. "The state needs to figure out what its priorities are."

Mehner, who is past president of the Missouri Economic Development Council, said he has looked at the issue for the past three years.

"I've argued until I'm blue in the face," he said. "It's a very complicated, convoluted, hard issue. Every one of these issues has supporters. But we as a state have to set priorities when we have very limited revenue, and that's the case right now."

smoyers@semissourian.com

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518 S. Fountain St., Cape Girardeau, MO