Tonight’s online edition of the Joplin Globe has a good article detailing the ongoing debate in Jeff City about tax credits. Here are a few comments from that article that I found noteworthy.
Nixon said about $585 million in tax credits were redeemed last fiscal year in Missouri, which amounts to an increase of 86 percent over the past decade. Redemptions of tax credits have continued to rise over the past two years despite declines in state revenues amid the economic downturn.
Nixon singled out two tax credit programs — one for historic preservation, the other for low-income housing projects — that he said have seen particularly explosive growth.
Nixon said Missouri ranks No. 1 in the country in historic tax credit redemptions. Those redemptions cost the state $186 million last year and $161 million in 2008. The state ranks No. 2 in redemptions of low-income housing tax credits, which cost the state $176 million in 2007.
“The growth of entitlement tax credit programs in Missouri is simply unsustainable,” Nixon said.
By contrast, the state ranks 45th in the nation on per capita spending for higher education and 35th for K-12 spending, he said.
Nixon has proposed capping the state’s annual authorization of tax credits at $314 million and reorganizing the state’s 60 tax credit programs into six general categories. The Department of Economic Development would have greater flexibility in deciding how much should be spent in each area and would have the authority to “choose the right deals” for the state, the governor said.
Nixon said tax credit reform is needed to provide accountability and transparency for how the credits are used.
The entire article can be found here.
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