JEFFERSON CITY— Missouri picks up the tab on property taxes and other expenses for many insurance companies across the state, thanks to a 60-year-old tax credit that allows them to deduct these taxes from the 2 percent insurance premium tax they pay the state each year.
But in a meeting of the Joint Committee on Tax Policy, committee Chairman Sen. Brad Lager, R-Maryville, said he's trying to figure out why the credit, which last year resulted in more than $8 million in deductions for insurance companies, is still on the books.
"The answer that we've done it for 60 years is not acceptable," Lager said.
Members of the committee also called for improved tracking of the state's 54 active tax credits and a better accounting of their economic impact.
Lager said the state is obligated to roughly $2.5 billion in tax credits over the next five years.
A request that the committee made three years ago for a tracking system that would allow members to see the exact amounts and types of outstanding tax credits has not yet been honored.
The committee made the request informally, and it isn't clear which department would be responsible for creating it. But Lager said he is prepared to introduce legislation if necessary to hasten the creation of such a system.
Rep. Mike Sutherland, R-Warrenton, said he wants to know what the state is getting for its money.
"If a business was spending billions of dollars and didn't know what it was getting for it, it wouldn't be in business very long," he said.
The committee has seen models of economic impact prepared by the Economic Development Department and some of the recipients of tax credits, but Lager said he would like to see independent assessments.
"I believe we need real-world, analytical data," he said.
Lager said this information would be the equivalent of a 401K — a retirement savings plan — and allow legislators to determine the appropriateness of current tax credits.