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Senate panel considers curtailing tax credits

Thursday, January 19, 2012 | 6:17 p.m. CST; updated 9:17 p.m. CST, Thursday, January 19, 2012

JEFFERSON CITY — The Senate Ways and Means Committee considered legislation Thursday to scale back Missouri's tax credits after the issue derailed September's special session of the General Assembly.

Four bills were presented to the committee that would pare down tax credits in Missouri. Supporters said their measures would free up revenue for other programs. In 2013, the state is expected to redeem $685 million in tax credits.

Related bills

Here are links to bills that seek reductions in Missouri tax credits

Senate Bill 472

Senate Bill 531

Senate Bill 548

Senate Bill 561

 



During last year's special session, changes to the state's tax credits failed to pass as the House and Senate could not agree on the programs' sunsets or on expiration dates for programs not reauthorized by the legislature. Sen. Will Kraus, R-Jackson County, sponsored one of the bills heard Thursday.

Kraus' bill would eliminate certain tax credits and apply the savings from the programs to lower the corporate income tax rate. Kraus said he hoped there would be enough additional revenue to get rid of the corporate income tax altogether.

"This would make Missouri a much more business friendly place for businesses to come. It eliminates the picking of winners and losers by different tax credits," Kraus said.

The measure would lower the low-income housing and historic preservation tax credits to 25 percent of their current value by 2016. The low-income housing credits cost the state $60 million a year, while the historic preservation credits cost $140 million.

Opponents argued that eliminating the tax credits would harm people who rely on affordable housing.

Carla Potts, deputy director of the North East Community Action Corp., spoke against eliminating the low-income housing program.

"It provides people a safe place to live," Potts said. "It provides them a place where their children can come home at night and do their homework in peace and quiet. These working families pay taxes and are vital parts of our communities."

Sen. John Lamping, R-St. Louis County, sponsored a similar bill and said eliminating the tax credits is not about hurting people but about finding different solutions to housing challenges.

"The war on poverty has been lost," Lamping said. "This effort to eradicate through government programs is a failure."

Sen. Maria Chappelle-Nadal, D-St. Louis County, does not agree with the tax cuts.

"I am kind of at a loss for words right now," she said. "The first bill that we passed last year was corporate welfare. ... That is money that could have helped people who are vulnerable."

Other bills presented were sponsored by Sen. Luann Ridgeway, R-Smithville, and Sen. Chuck Purgason, R-Caulfield.

The Ways and Means Committee took no action on the bills Thursday.

Jordan Shapiro is a reporter for Missouri Digital News.


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