A key state commission Friday recommended sharp cuts to Missouri’s popular historic tax credit program, though not as sharp as some people would like.
In a series of close votes three hours into an afternoon-long teleconference, members of Missouri’s Tax Credit Review Commission voted 8-6 to recommend that the Legislature put a $90 million cap on historic tax credits.
That’s a big cut from the $140 million cap now on the program, which has paid to rehab numerous buildings in St. Louis in recent years, but more generous than the $75 million cap the same group voted for two years ago.
The historic program, along with credits to build low-income housing, drove the cost of tax credits to the state treasury to a record $629 million last year. That sum prompted Gov. Jay Nixon to reconvene the 25-member commission that spent months in 2010 studying Missouri’s 61 tax credit programs.
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This year’s effort was abbreviated, and most of the recommendations repeated those from two years ago, including eliminating 28 mostly smaller programs and tweaking others. This time, like last time, the fiercest debate came over the two big ones.
A subcommittee studying low-income housing tax credits recommended paring that program to $135 million, from $195 million this year. That’s more than the $80 million proposed two years ago, but subcommittee Chairman — and Springfield low-income housing developer — Mark Gardner pointed out that need for the credit has grown.
“You can track the impact of the recession on low- to moderate-income people,” he said. “Things are deteriorating for the people who need this housing the most.”
The closest votes came next, over historic credits.
The committee studying them recommended a $90 million cap on the program — about in line with recent usage — with an exemption for small projects. It’s a cut, but a fair amount, said Tom Reeves, president of Pulaski Bank.
“We’re talking about freezing the program at recessionary levels,” he said. “We need to keep it in perspective.”
But Mike Wood, a lobbyist for the Missouri State Teachers Association, said he saw no reason to change from the $75 million cap the group voted for in 2010.
“This proposal is clearly a much larger program than we recommended,” he said of the $90 million plan. The “$75 million is more in line with the rest of the country.”
So he called a vote on $75 million. It tied, 6-6, with 11 members absent or abstaining. That kept Reeves’ $90 million proposal alive — and a few minutes later it was approved 8-6.
By the time the votes were held — three hours into the meeting — nearly half of the commission had moved on. The meeting was conducted entirely by telephone, at one point interrupted for several minutes when someone listening in put the call on hold, blaring slow jazz hold music too loud to talk over. Later, in the middle of the roll call on the $90 million cap, Enterprise Rent-A-Car executive Ray Wagner came back on the line after having left for a meeting.
“I just walked in,” he said. “I have no idea what we’re voting on.”
After a brief explanation, Wagner voted yes on $90 million.
The votes that really matter won’t happen until spring, if then. The commission’s report is not binding; it just offers recommendations due next week to Gov. Jay Nixon. Still, they will likely lay the groundwork for broad tax credit reforms, which both Nixon and leaders of the Legislature say they want to take up when the legislative session begins in January. They have taken up these issues several times over the last two years, with no progress.
