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Future uncertain for low-income housing tax credit program

JEFFERSON CITY, Mo. — Gov. Jay Nixon made a deal with Republican senators during the special session earlier this month. The deal was relatively simple. Nixon would get his Boeing package, which included $150 million annually in tax credits for the aerospace behemoth if the company chose to bring its new 777x-manufacturing project to Missouri. Members of the Senate who have championed tax credit reform would not filibuster or substantively slow down the bill’s process and in exchange, Nixon would make certain concessions on the state’s $600 million tax credit program.

The deal kept the bill alive through the Senate, where most lawmakers said it was most likely to be killed. The senators in question would not be required to approve the bill, but simply promise not to filibuster.

Gov. Jay Nixon
Gov. Jay Nixon

Earlier this week, as part of that arrangement, Nixon’s staff told members of the Housing Development Commission — which helps disburse the state’s Low Income Housing Tax Credits and which Nixon is a member of — to delay disbursing more than $13 million in tax credits for at least 90 days.

Commission members confirmed that Nixon’s staff cited his recent deal with Republicans as the reason for the delay. But the move leaves dozens of projects in limbo, stalling start dates and pushing back groundbreakings until mid-spring. Nixon and his staff haven’t did not provide details to The Missouri Times about the extent of their arrangement with Republicans in the senate, or whether or not there are more cuts to come.  A Nixon spokesperson said the commission will be allowed to consider disbursing funds in March, but did not clarify whether Nixon would support such a move.

Because the projects have been approved, but disbursement of funds has been delayed, much of the information the commission holds on the projects is not available to the public. Weylin Watson, General Counsel for the commission, issued a memo to staff and commission members advising a “quiet period,” on all projects at the Dec. 6 meeting, which had funding, delayed. Because the commission has nor formally reached a decision on the projects, details such as the return on investment and the jobs created per-credit will not be released until after a vote.

“If categorically we knew there was a delay, we could absorb this a little better,” Chris Krehmeyer, President and CEO of Beyond Housing. “The concern is, what happens if they suddenly decide they want to change some tax credits? To hold the low income housing tax credit hostage to the larger Boeing deal, that’s frustrating to us because we don’t know if we’ll be producing much-needed housing. It has sort of placed us in limbo.”

Beyond Housing was set to build a 53-person unit for senior citizens, and Krehmeyer said he has no indication of when, if ever, the project will be formally approved. He says the delay costs the state much-needed money.

“That’s no construction jobs to build it, no taxable property going up, and perhaps worst of all, there’s no sense of vitality and life created by this new beautiful structure that this community has needed for years,” Krehmeyer said.

Developers largely agreed that if the delay was lifted in March, — the next time the commission is set to handle the matter — that many projects will be delayed by about half a year. This impact would not be “world ending,” one developer said, but the general uncertainty surrounding whether funds will ever be released is creating some tension.

“We just don’t want this to be an ‘either/or’ situation,” Krehmeyer said. “We want those Boeing jobs, of course, and we know incentives must be provided. But we don’t want that to come at the cost of this real, affordable benefit we can bring to communities. We’re opposed to any situation in which the state says they will support either one or the other, but not both.”