Fiscal accountability: Making fundamental reforms to state tax credits

With the economy continuing to struggle, many Missourians are looking carefully at their budgets to see where their money is going and how they can get their finances balanced. The state is in a similar situation, and I have noticed a disturbing pattern of growth in state tax credits. The issuance of tax credits is out of control because of a lack of oversight and accountability. This must change.

A tax credit is a dollar-for-dollar reduction in tax liability that would otherwise be due to the state. The state offers many tax credits for a diverse list of causes, including historic preservation, low-income housing, livestock breeding and business development. In total, Missouri tax credits have exploded in the last 10 years, increasing by approximately 107 percent. This massive amount of growth needs to be checked. We must change our policy on the issuance and authorization of tax credits to include appropriate accountability and fiscal oversight.

Many tax-credit programs have expanded out of control. In December, for example, the Missouri Development Finance Board approved $25 million in tax credits for the Kansas City Chiefs for parking lots at Arrowhead Stadium in Kansas City and a new indoor training camp in St. Joseph. This is on top of the $50 million in tax credits this same board gave the Chiefs and Kansas City Royals in 2006 for stadium enhancements.

The popularity of tax credits can often be traced to the pockets of large corporations and special interests. These corporations and special interests are well-represented in the halls of the Capitol by lobbyists who try to convince legislators that special-interest tax credits create jobs or enhance economic development when all they really do is line the pockets of the beneficiaries.

This session, I am calling for fundamental reform to the way we approve and issue tax credits in our state. This calls for:

1. Elimination of the MDFB's ability to approve tax credits so that taxpayer funding of stadiums stops.

2. Requiring that all tax credit expenditures be approved by the legislature through the appropriations process like every other state expenditure.

Whether we spend a dollar on K-12 education or issue a dollar in tax credits, it all costs hard-working Missouri taxpayers the same. In tough economic times, we need to be able to weigh a dollar spent on a tax credit versus a dollar spent on a sheltered workshop or to provide access to health care. That is why we must require all tax credit expenditures be approved through the appropriations process.

Like Missouri families all across our state, I am looking toward the future, and I am concerned about Missouri's financial outlook. Simple tax-credit reform is necessary and must be accomplished this year. If we do not change the way we award tax credits in Missouri, we will create a structural imbalance in our budget that will plague our state's future indefinitely.

Jason Crowell of Cape Girardeau represents the 27th District in the Missouri Senate.