Tax Credit Reform Legislation

Lee’s Summit, February 10, 2011 – As the General Assembly looks for ways to cover as much as a $500 million shortfall for this budget year, we are forced to look in every nook and cranny for savings.  From my perspective, we are fortunate to have an opportunity to take such a close look at how Missouri does business.  In doing so, we can reinvent how government works for you, the taxpayer.

Because of the budget situation, one of the areas to focus on this year will be tax credit reform.  Missouri has over 60 tax credit programs.  Most tax credits were started with good intentions, but many have either outlived their usefulness or become ineffective.  I was honestly surprised to see we had tax credits for both charcoal producers and wood energy.  I was disappointed to learn that we had some tax credits that were focused on a single development or business.

This summer, a commission met to go over each of the state’s tax credit programs and offer recommendations for how each should be handled going forward.  The commission was made up of elected officials and business leaders from across the state.  While some of their recommendations will take time to enact, on the whole, the commission’s suggestions were solid.

This week, I introduced four tax credit reform bills related to those recommendations.  One bill, Senate Bill 256, would eliminate several tax credit programs entirely.  The second bill, SB 259, would put sunsets on tax credits that would previously continue to exist, meaning that legislators have to re-approve each specific tax credit program every few years.  The third and fourth bills, SB 257 and 258, would put restrictions and a spending cap on the two largest tax credit programs — low income housing and historic preservation.

While some tax credit programs can, and have, yielded positive benefits for Missouri, it is my duty as your senator to make sure your tax dollars are spent wisely.  Programs that are not efficient or effective deserve a closer look.  I hope my colleagues in the General Assembly will be willing to move this legislation forward to have a positive impact on Missouri’s bottom line.