An opponent of tax credits sits on the governor’s Tax Credit Review Commission, but tells the Missourinet he approaches his role on the commission with an open mind.
Sen. Matt Bartle, a Republican from Lee’s Summit, says he has come to view tax credits skeptically during his years in the state legislature.
“Well, I will tell you it’s no secret that I have come to believe that many, many tax credits do not yield the benefit that was promised. I mean, that’s no secret,” Bartle tells the Missourinet.
Missouri has 61 tax credit programs, providing incentives for a variety of projects from historic preservation to low-income housing. Missouri paid $584.7 million in tax credits in Fiscal Year 2009. Figures for the just-completed fiscal year will not be available until last next year.
An audit released by State Auditor Susan Montee in April disclosed that tax credit redemptions in the state increased from about $372 million in FY2001 to more than $584 million in FY2009, an increase of 75% in 8 years. General Revenue to the state, meanwhile, increased at a much slower rate. General Revenue has fared even worse of late. The state budget officers reports that the original General Revenue estimate for FY2010 was $7.764 billion. It was revised to $6.91 billion with actual net collections settling at $6.774 billion.
Shrinking state revenue combined with growing demand for state services has pushed state legislators to seek any ways to cut expenses and grow revenue. It has prompted increasing scrutiny of the state tax credit system, especially in the Senate which has blocked numerous economic development measures due to concern about what they might do to state revenue. Senators have also expressed concern about placing state government in a position to choose winners and losers in economic development.
Governor Nixon has appointed 25 business, community and legislative leaders to serve on the commission. Bartle is among the five current legislators on the commission. Nixon also appointed Sen. Jolie Justus (D-Kansas City), Sen. Robin Wright-Jones (D-St. Louis), Rep. Tim Flook (R-Liberty) and Rep. Sam Komo (D-House Springs). St. Louis businessman Steve Stogel and St. Charles County Director of Administration Chuck Gross, a former state senator, will serve as co-chairman.
Bartle would prefer scrapping tax credits in favor of lowering overall business taxes as an incentive for firms to create jobs. He understands the commission won’t go that far in its recommendations.
“When I say an open mind as it applies to me, I’ve got to come into the process looking at what’s politically possible rather than just talking about what’s theoretically optimal,” says Bartle.
The commission is to report to the governor by November first.
AUDIO: Brent Martin reports [:60 MP3]
