by Michael R. Allen
This week the Missouri Senate Committee on Jobs and Economic Development took aim at Missouri’s successful historic rehabilitation tax credit program. By a 9-1 vote, the committee passed to the full Senate a substitute economic development bill (SCS SB120) that would make the following, troubling changes to Missouri’s historic tax credit:
- Reduction of the cap on historic tax credits to $75 million from $161 million, with a new cap of $10 million imposed on small projects.
- Reduction of maximum award of historic tax credits for residential properties by 50%.
- Prohibition of the combination of 9% low income housing tax credits and historic tax credits.
- Carry back of historic tax credits reduced from ten years to two years.
The bill also reduces the availability of income housing development tax credits to a $110 million annual cap.
The substitute has an emergency clause, meaning that the changes would go into effect immediately upon the signature of Governor Jay Nixon. Of course, Nixon’s stance is unknown despite perceived hostility toward current levels of historic tax credit availability. And any provisions would have to get through the full Senate and the House, which has not moved on any proposals to alter the current program.
In committee, members Senator John Lamping (R-St. Louis County) and Kraus (R-Lee’s Summit) stated that the reduction was not large enough while Senator Jamilah Nasheed (D-St. Louis) was adamantly against the changes to both the historic and low income housing tax credits. Still, Nasheed supported the bill while Lamping was the lone dissenter. Senator Eric Schmitt (R-Glendale) sponsored the bill.
Curiously, given the majority’s expressed concern about the costs of tax credits to Missouri, the committee substitute includes millions in new tax credits for the proposed Data Storage Centers Tax Incentives and the Missouri Export Incentive Act (a deflated “Aerotropolis” tax credit) as well as additional Brownfield Credits in areas qualified for Distressed Areas Land Assemblage Tax Credit. The substitute eliminates the Neighborhood Preservation Act and the Self Employed Health Insurance Tax Credit, making it clearly a mixture born out of worship of big business and new development.
SCS SB120 should be placed on the Senate calendar next week. That gives people time to let their state senators know that the substitute should be defeated (find you senator here).