Motion approved by committee also caps historic tax credits at $120 million
JEFFERSON CITY, Mo. –House Budget Chairman Scott Fitzpatrick and members of the House Budget Committee have made the decision to not authorize state low-income housing tax credits for the upcoming fiscal year. The committee approved a motion Friday morning that would ensure the state does not issue the controversial credits from July 1, 2018 through June 30, 2019.
The committee’s decision comes on the heels of a decision made in December by the Missouri Housing Development Commission (MHDC) to not use state dollars to match the $140 million in federal low-income housing credits. The decision was hailed by critics of the credits as a way to spur much-needed changes to the inefficient program.
The Budget Committee also decided to limit the state’s historic tax credits to $120 million for the next fiscal year. The credits previously had a cap of $140 million, which has been the highest cap in the nation and more than double that of the next highest state.
“We spend more on these tax credits than almost any other state in the nation, and the return on our investment is unacceptable to Missouri taxpayers,” said Fitzpatrick, R-Shell Knob. “Hopefully this decision, combined with the actions of MHDC, will prompt a much-needed discussion on substantive tax credit reform.”
State audits have been critical of both the low-income housing and historic tax credit programs for inefficiencies. In 2017, the Missouri State Auditor issued a report saying both programs “result in a low return on the state’s investment.”
The motion approved by the Budget Committee also ends tax credits for the next fiscal year for grape and wine producers, innovation campuses, and qualified beef.