Senate Leaders today outlined taxpayer protections they would like to see the House consider in the large jobs and tax credit reform bill the Missouri Senate advanced to the House last week. Senate Substitute for Senate Bill 8  is scheduled for debate in the House this week. House leadership and the governor have proposed changes to the Senate bill that Senate Leader Robert N. Mayer, R-Dexter, and Senate Majority Floor Leader Tom Dempsey, R-St. Charles, said jeopardize the Senate’s support because taxpayer protections are too lax.

“Every day we delay reining in spending on state tax credits, we are putting funding for education, social services and other critical functions of state government more at risk,” said Mayer. “We’re spending half a billion dollars a year on tax credits, plus the state has more than $2.5 billion in tax credit liabilities. The writing is on the wall, we must corral spending on these credits.”

Mayer and Dempsey outlined a number of concerns senators have raised regarding the House’s proposed version. Six main concerns include:

• The removal of the seven-year sunsets that were included in the bill that passed the Senate for both the Historic Preservation and Low-Income Housing tax credit programs. Mayer noted these two programs cost the state the most at a combined total of more than $250 million annually and are the only two tax credit programs in Missouri currently without a mandatory review or sunset date.
• The language defining “projected jobs” in relation to square footage and the failure to require a dollar-for-dollar return on investment concerning the new category created for warehouses and distribution centers with expanded spending in the BUILD program.
• The expedited process of awarding Historic Preservation credits without state verification of the expenses actually incurred.
• The extension of the sunset of the Missouri Development Finance Board to 2014. The Senate version sunset the board upon enactment of the bill.
• The House version included language concerning the Missouri Housing Development Commission’s operating budget, which goes beyond the scope of the governor’s call.
• And the provision that would limit the state’s ability to recapture tax credits for entities that have failed to meet their obligations.

Dempsey said the Senate is committed to helping put Missourians back to work, but not at the expense of safeguards to protect Missouri taxpayers.

 “We have taken big steps to help put Missourians back to work, including phasing out the corporate franchise tax so companies can invest in hiring new employees rather than paying a double taxation aimed at growing government,” said Dempsey. “We have a history in Missouri of protecting taxpayers by implementing incentives that require up-front job creation and investments before any tax breaks are awarded. We are willing to build on this history, as long as safeguards are in place to protect the hard-working Missourians footing the bill and our state’s ability to meet our budget obligations.”

The Senate bill, introduced and considered as part of a special session called by the governor, is aimed at creating performance-based tax incentive programs to help spur job creation while requiring mandatory reviews and caps to dramatically reduce the amount spent on tax credits annually. SB 8 is estimated to save taxpayers $947 million over the next 15 years.

Search for: