Jay Nixon seeks repeal of Missouri tax credit for low-income renters

And this time, the effort to repeal it may have momentum, thanks to Gov. Jay Nixon.

Nixon, a Democrat, proposed in his state budget for the coming fiscal year to repeal the so-called “circuit breaker” credit for elderly and disabled people who rent their homes. The credit was claimed by about 107,000 people last year, costing the state roughly $57 million.

In 2010, a commission appointed by Nixon recommended eliminating the credit for renters, saying the program was intended to help homeowners on fixed incomes pay property taxes. After initially balking, Nixon endorsed the move in the fall of 2011.

But when legislators took up the proposal, they were bombarded with criticism that they were making poor people pay for tax credit reform while sparing rich developers’ programs. In September 2011, the Senate preserved the credit by a one-vote margin.

Now, Nixon has a new strategy that could change those dynamics. The governor called for putting the money saved from the credit’s repeal into a new Senior Services Protection Fund.

His budget would use that fund to pay for services such as nursing home care and “homemaker chore” and personal care programs, which provide aides to help frail people stay in their homes.

Senate Appropriations Committee Chairman Kurt Schaefer, R-Columbia, who cast a pivotal vote in favor of keeping the tax credit in 2011, said Nixon has sparked “a different discussion because it’s a reallocation of resources to the same people, as opposed to reallocating that to economic development.”

In Nixon’s budget, some of the savings would help cover growing in-home care caseloads, and some would provide 3 percent rate increases for certain Medicaid providers.

For example, the state would pay nursing homes an additional $3.72 a day, on average, for each Medicaid-funded resident, putting the new average reimbursement at $151.15 a day.

Overall, about $31.4 million of the savings would go to home- and community based services, $11.9 million would go to nursing homes and about $11.2 million would go to mental health community providers. Another $1 million would increase home-delivered meals for seniors, while $939,957 would boost hospices.

Nixon told reporters last month those expenditures would have more impact on seniors than the tax credit does.

Some people who receive the credit disagree. Some make too much to qualify for Medicaid and might receive no assistance from the diverted money. Others said they need help with daily living expenses, not nursing home care.

Charlotte Moten, 56, of St. Louis, came to the Capitol last week to lobby for the tax credit. Each year, the program gives her a refund check of about $300.

Though critics argue that renters don’t deserve the credit because they don’t pay property taxes, Moten said the landlord rolls his costs into the rent, so “you’re paying it because you’re paying the rent.”

Moten, who uses a walker because of arthritis and a foot condition, said without the check, she couldn’t afford dental exams, which aren’t covered for most adults on Medicaid and are especially important for her because of a jawbone disease.

Some health care advocates are torn by the governor’s proposal.

While providers would love the higher reimbursement rates, “we absolutely do not agree with taking money out of our consumers’ pockets,” said Carrie Craig, director of advocacy and outreach for ADAPT of Missouri, which provides services for the mentally ill.

Craig, who accompanied Moten to the Capitol to lobby against the credit’s repeal, said many people use the money for basic items, such as shoes and bus passes.

The program provides up to $750 a year for qualifying renters — single people who make less than $27,500, and couples who make less than $29,500.

Taxpayers claim the credit on a sliding scale based on income and how much they paid in property tax or rent. To be eligible, a person or the person’s spouse must be at least 65, or 100 percent disabled.

So far, no bill to repeal the credit has been filed, but a senator said he plans to introduce it to get the debate going.

“We’ll see if it’s a good idea,” said Sen. John Lamping, R-Ladue. “I’m not afraid to file legislation for the purpose of understanding it.”

If legislators don’t repeal the credit, they’ll have to cut other items in the budget if they want to find more money for in-home care or higher provider rates.

For now, House Budget Committee Chair Rick Stream, R-Kirkwood, is counting on elimination of the credit. He said the repeal has “a decent chance” of passing, so he included the savings in the budget bills he filed last week.

But Stream said legislators might soften the impact on seniors losing their rebates. He said one option is to “phase it out over time or change the parameters” of who receives it.

Democrats are girding to fight for the credit.

A breakdown provided to House Democrats shows that people in six House districts in St. Louis claimed the most tax credits for renters — more than $1 million in each district.

Rep. Rory Ellinger, D-University City, said the credit helps people stay independent and avoid costly nursing home care.

“Generally, I do not agree with that (repeal), unless we have something to take its place,” said Ellinger, a member of the House Social Services Appropriations Committee, which will vote on reallocating the credit’s savings this week. The state fiscal year begins July 1.