State legislators are approaching tax credit reform in a piecemeal, rather than comprehensive, fashion.
Reform efforts can be done on an individual or wholesale basis.
The wholesale approach was adopted by the Bi-Partisan Tax Credit Review Commission, created in 2010 by Gov. Jay Nixon to review Missouri’s 61 tax credit programs.
After comprehensive review, the panel produced a 55-page report that recommended eliminating 28 programs and improving 30 others for a combined savings of $220 million over the following five years.
Through 2011-12, lawmakers largely avoided the issue of tax credit reform, partly because of disagreements between the House and Senate on the role of tax credits.
Despite bills proposing comprehensive reform, much action is being taken this session on an individual basis.
- The Missouri House approved legislation to reinstate tax credits for donations to specific charitable organizations, including food pantries, pregnancy resource centers and child crisis nurseries. The bill now moves to the Senate, which OK’d a similar bill last week.
- The Senate last week created a specialized tax credit to attract amateur sporting events to Missouri. The proposal would reimburse sponsors of those events $5 for each ticket sold.
- Also last week, the Senate eliminated a $2 million annual allotment of tax credits for parents who adopt children from outside Missouri. The existing $2 million in incentives for in-state adoptions would remain.
- A proposal to provide tax breaks for an international air cargo hub at Lambert Airport in the St. Louis area has been reintroduced this year.
In addition to this piecemeal approach, the Senate Appropriations Committee on Monday began reviewing the state’s existing 61 tax credits to determine their effect on the budget.
We prefer the comprehensive approach because it offers a look not only at the individual merits of a tax incentive, but how those merits compare to other incentives on the spectrum.
Copyright Jefferson City News Tribune. Reprinted with permission.