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Missouri charities oppose Gov. Jay Nixon's proposed tax credit caps

Monday, May 10, 2010 | 6:58 p.m. CDT

JEFFERSON CITY — Charities that benefit from state tax credits united Monday against attempts by Gov. Jay Nixon and some lawmakers to limit the dozens of tax incentives offered by Missouri.

With only a week remaining in Missouri's annual legislative session, the Democratic governor and some Republican senators still hope to sharply reduce the amount of annual tax credits authorized by the state and bring in more money for education and other government programs.

Representatives of pregnancy crisis centers, children's agencies, domestic violence shelters and Catholic charities teamed up Monday to tout the benefits of tax breaks for benevolent organizations.

Missouri offers tax credits equal to 50 percent of the contributions made to maternity homes, pregnancy resource centers, domestic violence shelters and food pantries. It also grants a 50 percent tax credit for donations or wages paid to youth in certain internship, apprenticeship and job programs.

Unlike a tax deduction, which reduces the amount of income that's taxed, a tax credit reduces the amount of taxes owed. A 50 percent tax credit for a charitable contribution can allow donors to double the amount they otherwise would give. For example, people who might be able to afford a $100 donation could instead give $200 and still be out-of-pocket only $100 after the credit is applied on their state income taxes.

"These tax credits do leverage funds to raise many more times those dollars in local communities," said Cindi Boston, CEO of the Pregnancy Care Center in Springfield.

Others suggested it was a poor time to cut state incentives for charitable groups, because some social services are already receiving less money from the state.

"Messing with this would in fact be a de-stimulus program," said Pat Dougherty, a former Democratic state senator who now lobbies on behalf Catholic Charities for the Archdiocese of St. Louis.

Charitable tax credits comprised a small percentage of the $585 million of state income tax credits redeemed in Missouri last year. The programs creating tax credits for maternity homes, pregnancy resource centers, domestic violence shelters and food pantries are already capped at $2 million each per year.

Nixon hasn't targeted charitable tax credits specifically but has said the size and scope of Missouri's tax credits have grown too large and are sapping money that could go to public schools, colleges and universities. Dozens of education officials joined him at a Capitol news conference last month.

In March, Nixon's administration proposed reorganizing the state's roughly 60 tax credit programs into six general categories and capping certain tax credits at $314 million per year.

Some Republican senators have been pushing for two years to overhaul Missouri's approach to tax credits. One of their proposals would give greater authority to legislative budget writers to determine how much to allot to each program.

Last week, Sen. Brad Lager, R-Savannah, distributed what he described as a revised proposal from Nixon's administration. It would make 49 of the existing tax credit programs subject to an annual allocation by lawmakers and limit their total to $370 million a year.

Republican House leaders have defended tax credits as good economic development tools and have denounced efforts to sharply curtail them.

Rep. Shane Schoeller, R-Willard, who organized Monday's news conference with the charities, said he wants to delay any changes to Missouri's tax credit system for at least a year so it can be studied further.


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