Budget committee may make restarting low-income housing tax credit harder | St. Louis Public Radio

Budget committee may make restarting low-income housing tax credit harder

May 28, 2018

Since Gov. Eric Greitens’ scandal broke wide open in January, there’s been a well-accepted assumption that if the GOP chief executive resigns it would lead to Lt. Gov. Mike Parson restarting the shuttered low-income housing tax credit.

House Budget Committee Chairman Scott Fitzpatrick has a message for fans of that program: Not so fast.

In the finals days of the Missouri General Assembly’s regular session, the Shell Knob Republican relied on a state law allowing his committee to prevent tax credits from being issued. It’s a move he says could provide leverage to alter the program — even if Parson, a vocal low-income housing tax credit supporter, takes the reins of state government.

“It basically says we have to review the estimates of the credits and approve them before they can be issued or certified for any tax year beginning after July 1,” said Fitzpatrick, alluding to what state law states. “We did one last year, the wine and grape credit. There was one quite some time before that that wasn’t authorized. And so, it’s one of those things that was always kind of a formality. But this year, we did it a little bit different.”

Greitens and his allies on the Missouri Housing Development Commission halted the issuance of state low-income housing tax credits. The governor contends the tax credit is wasteful, while supporters, such as Parson, said the incentive provides much needed housing for the poor, elderly and disabled. In any event, it's possible that Greitens may prevent the incentive from being issued as long as he remains in office.

If Parson becomes governor, he could appoint enough people to the MHDC to restart the program. But in that scenario, Fitzpatrick said supporters of the incentive will have to make a case for the House Budget Committee to authorize the credit to be issued. And he said the committee may not restart the incentive unless the legislature makes changes, such as lowering the amount of credits issued each year.

“My hope is we’ll be able to roll into January next year and this will help provide some leverage to get some actual reform on the tax credit,” Fitzpatrick said. “If there hasn’t been some deal made on LIHTC, my position would be to take that same action until we get a deal — regardless of who the governor is.”

But not everybody believes what the budget committee did will stand.

State Rep. Deb Lavender, D-Kirkwood, said that the committee’s action will likely face a legal challenge. In her view, both the House Budget Committee and the Senate Appropriations Committee must act to deauthorize a tax credit. That didn’t happen in this situation.

“I think for this to really have the teeth of the statute, the Senate would have had to sign onto this also — and they did not,” Lavender said.

Beyond whether the decision will stand, Lavender said the House Budget Committee’s decision could upset the balance of power between the House and the Senate. That’s because Fitzpatrick will almost certainly keep his job as House Budget Committee chairman, while someone else will lead the Senate Appropriations Committee.

“So just from a consistency point of view, Scott has more authority right now and years of experience in that position that people will default to him for what we’re going to do budgetarily at least right now,” Lavender said. “And so, it is problematic that we take $140 million — we just strip it right out of low income housing. That’s likely to be two years that we’re not investing in units for low-income people.”

Cloud over Greitens’ future

The low-income housing tax credit freeze has hovered in the background since the allegations against Greitens were made in January. 

Missouri Governor Eric Greitens walks out of the Civil Courts Building in downtown St. Louis after his felony invasion of privacy charge was dropped on May 14, 2018.
Credit File photo I Carolina Hidalgo | St. Louis Public Radio

That’s because the governor’s attorneys believe that the reveal of his extramarital affair was retaliation for halting the state program. Greitens’ attorneys recently sent a letter to state Rep. Jay Barnes asking his committee to subpoena key players with the low-income housing tax credit program, including Columbia developer Jeff Smith. He has not responded to a request for comment from St. Louis Public Radio.

In any case, when asked, Fitzpatrick agreed that a benefit of his decision could be that lawmakers don’t have to worry about the perception that they’re kicking Greitens out of office as a way to restart the low-income housing tax credit.

“I think what you observed is probably a byproduct of the decision that could just be kind of a happy coincidence,” Fitzpatrick said. “But in reality, if you even look at my voting record on tax credits — it would not be inconsistent with what my record would show as far as how I would feel about some of these things.”

On the Trail, a weekly column, weaves together some of the intriguing threads from the world of Missouri politics.

Follow Jason on Twitter: @jrosenbaum