DRUG TAX CREDIT DESERVES EXPLANATION

The handling of Missouri's new prescription drug tax credit raises questions state officials should answer.

The program ended up costing the state $82 million the first year it was offered, when it was expected to have cost $20 million. State budget officials estimated that 130,500 people would apply for the tax credit, but it was issued to 452,294 tax filers.

The tax credit was for pharmaceutical expenses and was intended for people 65 or older who were not living in government-funded housing and not receiving full reimbursement for medicine from Medicaid or Medicare. A person earning $15,000 or less could get a full credit of $200 for prescription drug expenses. People earning more could get reduced credit amounts.

But the state did not require evidence of actual pharmaceutical expenses and allowed the credit to those who did not ask for it and to those who were qualified for Medicaid.

So who is to blame?

A critical Sen. Betty Sims, R-Ladue, a member of the Senate Appropriations Committee, said the Missouri Department of Revenue "ignored the question of need and just gave out the money."

A report by the state Senate research staff said the Department of Revenue "implemented the law in ways that increased the number of people who received the credit."

Later reports showed the initial legislation that enabled the tax credit described a program "for out-of-pocket costs for prescription drugs." But the final version of the legislation omitted the part that tied the credit to out-of-pocket costs and instead gave a full $200 tax credit to everyone over 65 who earned $15,000 or less and a partial credit to everyone over 65 earning $25,000.

Later, the Department of Revenue said its original estimate of the program's cost was incorrect, because that estimate failed to take into account the fact that Social Security benefits would not be counted as income under the plan.

One wonders too why someone in the Department of Revenue didn't catch the fact that the program was going to quadruple in costs and tell someone else.

Another point worth considering: Then-state treasurer Bob Holden's name went on each of the 452,294 checks for the tax credits that were sent to senior citizens in the same year Holden sought -- successfully -- the governor's office.

The prescription-credit blunder adds to a list of recent miscues by Missouri officials who continue to return to voters for their trust, not to mention much of what's in taxpayers' wallets.