Nixon vetoes repeal of low-income senior, disabled residents tax break

JEFFERSON CITY, Mo. -- Gov. Jay Nixon vetoed legislation Tuesday that would have repealed a tax break for low-income seniors and disabled residents who live in rental housing.

Although he had proposed the elimination of the tax break earlier this year, Nixon's veto of the legislation came as no surprise. The Democratic governor had said he would accept the tax-break repeal only if it were part of a broad-based overhaul of Missouri's numerous tax credit programs.

The Republican-led Legislature sent Nixon a stand-alone bill that would have ended the tax break for senior and disabled renters. It has not passed a separate, more comprehensive tax credit overhaul and is running out of time to do so before the session ends at 6 p.m. Friday.

Lawmakers could still pass an alternative funding mechanism for those programs before the session ends.

"Effective tax credit reform must be broad-based and designed to ensure that all tax credit programs provide a strong return for taxpayers, our communities and our economy," Nixon said in his written veto message. "Such an approach is fiscally prudent and would build upon the State of Missouri's strong financial foundation. Senate Bill No. 350 does not constitute comprehensive tax credit reform."

The fiscal 2014 budget passed last week by lawmakers relied upon savings from the tax-credit repeal to finance about $55 million of expenditures, including the First Steps program for children age 3 and younger who have developmental disabilities or delays. Money from the repealed tax credit also would have been redirected to other early childhood special education programs, health care for the blind and medical clinics that serve lower-income residents.

House Budget Committee Chairman Rep. Rick Stream, R-Kirkwood, called the governor's veto "disappointing." He said the Legislature would pursue other options, including putting the tax credit repeal into a larger package that also scales back incentives for historic buildings and low-income housing.