State Sen. Crowell renews quest for tax credit votes

State Sen. Jason Crowell is renewing his crusade to alter the way tax credits for economic development projects are awarded in Missouri.

Crowell, R-Cape Girardeau, tried unsuccessfully last year to force all tax credit programs to win annual votes to account for the money not collected by the state when the tax credits are used. Tax credits, which are deductions from the taxes owed by the people who use them, must be able to justify their value when compared to other state responsibilities like education, Crowell said.

To push for that debate, Crowell introduced a bill this week that would submit the amount of tax credits in each program to legislative appropriations, just like spending items. The agencies that award the credits would be required to explain why credits were awarded and show that the expense makes sense for the state, Crowell said.

"You can't be everything to everybody," Crowell said. "It is my hope that accountability and oversight will be brought into that aspect of state appropriations where it does not exist now."

So far this fiscal year, Gov. Jay Nixon has vetoed or withheld $634 million in spending approved by lawmakers last year. Additional cuts will be required in the next fiscal year beginning June 30, as revenue lags due to the recession and the general revenue fund receives an estimated $780 million less than it took in during the year that ended June 30, 2008.

The cuts for the upcoming year include $2.55 million from Southeast Missouri State University, Crowell said. In this year's budget, cuts include millions from transportation funds for public schools.

Tax credits reduced state revenue by $584.7 million in 2009, Crowell said in a news release. The credits include $25 million for parking improvements and a practice facility for the Kansas City Chiefs and $19 million for a developer purchasing land in north St. Louis.

"I think individuals, when they see $25 million to the Kansas City Chiefs and we are talking about cutting education or not funding the career ladder for teachers, it is hard to go home and justify a decision that produces that result," Crowell said.

Tax credits offered by the state generally serve one of two purposes -- a social purpose such as a tax break for donations to food pantries or to cut the property taxes owed by senior citizens, or an economic development purpose such as supporting job creation in enterprise zones. Some do both, such as tax credits offered to developers who build low- to moderate-income housing like Schultz Senior Apartments, 101 S. Pacific St.

Jackson developer Chad Hartle, using housing tax credits and historic preservation tax credits, remodeled the 95-year-old former school building into 45 apartments. He received $600,000 in state and federal low-income housing tax credits annually for 10 years as part of the deal.

Crowell said the result is a loss of state revenue that means each apartment in Schultz cost taxpayers $400,000.

The value of each tax credit program, Crowell said, will be measured when annual allocations are approved by the House, Senate and governor as part of the appropriation process. In too many instances, he said, tax credits are treated like entitlements.

"Basically the current system provides special interest groups a way to use backroom politics to funnel money toward controversial projects that would never be approved by the General Assembly," Crowell said in a news release. "By avoiding an open process of issuing tax credits, many developers and companies can continue to line their pockets with hard earned taxpayer money without being accountable."

rkeller@semissourian.com

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