COLUMBIA — Tax credits have become a pressing issue in the past year as Missouri hopes to solve its budget crisis. Gov. Jay Nixon created the Tax Credit Review Commission on July 21 to analyze the 61 tax credit programs in the state. According to a September Associated Press report, the commission will make a recommendation for which programs should face cuts by Thanksgiving. According to the report, the state will grant almost $500 million in credits for the year.
A breakdown of each candidates’ views on tax credits is presented below.
Republican John Cauthorn of Mexico said tax credits are great for the business community, including those in the largely rural district he hopes to represent after elections next week.
He said that businesses in the renewable energy and agricultural sectors have benefited from tax credits. Both these areas are personally important to Cauthorn as a farmer who frequently mentions his interest in renewable energy. He also is passionate about mid-Missouri residents buying items locally.
Democrat Kelly Schultz of Shaw said if elected to office, she will go through the state’s tax credits, line by line, to be sure that each is a wise investment of the state’s tax dollars. She has reminded the public at candidate forums that she has experience working with budgets in Jefferson City and is ready to tackle the tedious job of combing through credits and looking for problems.
In terms of both economic development and charitable tax credits, she said she plans to make sure they are delivering what was promised to members of the community.
Republican Paul Szopa said it is appropriate to use taxpayer money “when there is a high level of certainty that the money is going to come back to the state.”
Szopa, however, said he is “philosophically opposed” to tax credits as business incentives.
“It’s unfair for one community to see the benefits, but all communities have to pay,” Szopa said.
During a summer special session, the Missouri General Assembly approved a bill allowing automakers to keep employee withholding taxes they would normally pay to the state if the automakers, in turn, agree to expand or build new facilities in the state. Gov. Jay Nixon signed the bill into law in July.
The bill targeted Ford Motor Co., which has a plant near Kansas City that employs about 3,700 people.
“I would have been absolutely opposed to that,” Szopa said, adding “there would be no guarantee Ford would continue to use that plant.”
Incumbent Democrat Stephen Webber, who is seeking a second term, said he could get behind tax credits as incentives to bring in businesses.
“It could be an effective economic development tool,” Webber said.
Webber said there is a great deal of competition among states to bring in businesses, and Missouri must do what it takes to stay on the front edge.
Webber said Columbia has used tax credits effectively in upgrading and constructing new buildings downtown, building low-income housing for seniors and bringing companies into the city, such as IBM and ABC Labs.
“It’s difficult to say whether all incentives are good or bad, but all in all, it’s been beneficial to Columbia,” Webber said.
Incumbent Democrat Chris Kelly spoke in favor of tax credits for public housing. He believes public-private partnerships such as Bethel Ridge Estates in Columbia are more efficient than older public housing projects that were completely government funded.
He pointed out the failure of the Pruitt-Igoe housing project in St. Louis, which was torn down just two decades after it was constructed.
“We have decided in this country to subsidize some housing,” Kelly said. "Now, we just have to find the most rational way to do it.”
He believes that tax credits for low-income and senior housing are an improvement because the owners of the housing developments have a huge financial incentive to keep them livable for the long-term.
“Most tax credits are popular when looked at individually,” he said. “It’s when you mention tax credits generally that you see opposition.”
Republican Laura Nauser also supports tax credits to help house seniors and people with either low incomes or disabilities.
“Since housing for seniors and the disabled requires special accommodations, it is important to give incentives for housing developers,” she said. “The state or local government won’t have to build these facilities in the future if private companies do it now, and that will benefit everyone.”
However, Nauser believes credits for attracting businesses are even more important. She said one of her primary goals, if elected, would be to bring news jobs to the state, and she believes tax credits can provide incentives to corporations.
She mentioned the tax credits for the 3M plant as well as the IBM data center as examples of how tax credits can create potential jobs. She said, however, it is very important to make sure that corporations hold their end of the bargain and provide the promised number of jobs.