JEFFERSON CITY — The historic preservation tax credit is still intact after reviewers voted down an amendment Tuesday that would have recommended the legislature slash $50 million from the program.
The historic preservation tax credit for developers rejuvenating old buildings is one of 61 tax credit programs slated to take a cut to help balance the state's budget. Gov. Jay Nixon launched the Tax Credit Review Commission in July to provide the legislature with recommendations for cuts.
"We said it (the historic preservation tax credit) is a great program, it needs to stay an entitlement program, it needs to work mechanically the way it does with certain nuance changes to address public optics about transparency and so forth," said review commission member Greg Smith. "The last thing I think went unaddressed was sort of the question of: What level of pain can you absorb? Because all 61 programs are going to have to absorb some pain."
The historic preservation tax credit is by far the most expensive tax credit program in the state, according to an audit released in April. Roughly $637 million was redeemed in the tax credits between fiscal years 2005 and 2009 — about $224 million more than the next highest tax credit.
The cap is currently set at $140 million per year. While the subcommittee for the tax credits provided recommendations for more efficiency, they did not originally suggest a lower cap for the credit.
The amendment, proposed by Peter Noonan, would have reduced the cap to $90 million. It would have also added guidelines for the program's transition to less available funding and provided a formula for figuring future funding limits.
Members of the group argued that the amendment created too many ways to get the tax credit while avoiding the capped amount of funding.
"At the end, does the $90 million cap really mean anything? Is it not swallowed up by some of these exceptions and transition rules?" review member Ray Wagner* asked of the group in its meeting.
The commission is set to discuss the recommendation Wednesday morning.