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Greitens forms special committee to audit tax credits

  

JEFFERSON CITY, Mo. – Gov. Eric Greitens took to social media again to promote his newest executive order, one which may be his most impactful yet.

The governor announced the formation of a new committee, the Governor’s Committee for Simple, Fair, and Low Taxes, to investigate Missouri’s tax credit scheme by judging it against other states, assessing the impact of current tax credits, and possibly financing tax rate cuts to corresponding cuts to tax credit programs.

“What our people want is a tax system that is simple, fair, and low. What we have instead is a tax system that is complex, corrupt, and high,” Greitens said in a statement, adding the committee is “going to devote itself to fixing this system for the benefit of all people, not just the well-connected. Our argument is clear: A simple and fair tax system will help create jobs.”

Greitens’ press secretary Parker Briden expanded that the committee would do “an end-to-end audit of our entire tax system.”

At a future date, the governor will name four people to the committee, while Speaker Todd Richardson and Senate President Pro Tem Ron Richard will each name three. They will be required to report their findings by the end of June.

Greitens creates this committee in the midst of a major budget crunch for the state of Missouri. The red ink has put Missouri in a difficult position as the state is constitutionally required to balance its budget. Former Gov. Jay Nixon withheld over $200 million from the budget in the last three months he held office, and last week, Greitens withheld $146 million just a few days into his term. Conservative Republicans argued increased spending has created the imbalance on the books, but Democrats believe corporate tax cuts and continual slashes at revenue from the supermajority party have made the state fiscally insolvent.

Regardless, the creation of this committee reiterates the governor’s commitment to pursuing the conservative route to fiscal solvency. Greitens has already taken a strong stance on one particular tax credit; in December before he took office, he vocally opposed $20 million in taxpayer funding in the form of tax credits for SC STL to build an MLS soccer stadium in St. Louis, calling it “welfare for billionaires.”

Missouri currently has a number of tax credits, from property and low-income housing credits (LIHTC), to more varied, specialty tax credits, like the Wine and Grape Production Tax Credit and the Adoption Tax Credit. A full list can be found here.

Some argue those credits serve an important role in providing benefits for Missouri’s economy and its populace. Jeff Smith, the executive director of the Missouri Workforce Housing Association, currently works to craft workforce housing policy at the federal, state and local levels. He says LIHTCs can incur as little as 25 percent of the cost to the state as an average nursing home unit, and those credits can help seniors as well as working families, those suffering from mental illnesses and physical disabilities, and even veterans.

While tax credits often become the scapegoat, Smith says they can provide a lot of good if they are created and implemented correctly.

“One of the keys to structuring tax credits effectively is to make sure that jobs are actually created or there is actually a benefit on the back end as opposed to just a giveaway,” Smith said.

Smith added the committee should be careful not to hurt those tax credits which do provide a lot of worth to Missourians, and he said he would continue advocating that the LIHTC is one of those successful programs.

“It’s important we remain vigilant and continue to educate policymakers about the tremendous benefits of the program. There’s a reason tens of thousands of people all over the state are on wait lists to get into safe and affordable LIHTC developments. The demand is as high as ever.”

Greitens did not hold a press conference regarding the executive order to give reporters an opportunity to ask questions.