The Missouri House passed legislation on Thursday curtailing two of the state’s largest tax credit programs.
State Rep. Anne Zerr’s bill would reduce the historic preservation tax credit’s cap to $90 million from $140 million. That program helps refurbish older buildings and has been used extensively throughout St. Louis.
The bill would also gradually reduce the cap on the tax credit for low-income housing to $110 million from $140 million. That credit provides an incentive for developers to build housing for the working poor, elderly and disabled.
Additionally, Zerr’s bill either adds or increases other tax credits. That includes extending the land assemblage tax credit, which developer Paul McKee used for his Northside Regeneration project. It also authorizes tax credits for creating data centers and for incentives to export Missouri goods.
“We’re encouraging investment in next-generation technology and next-generation jobs,” Zerr, R-St. Charles, said. “In addition, the House is fulfilling its commitment once again to send to the Senate a re-prioritizing of certain tax credit incentives.”
The bill passed 96-54, far short of a veto-proof majority. For years, the House and the Senate have been at odds over the size of tax credits for historic preservation and low-income housing. In general, the Senate has wanted to lower the caps for both programs. The House has at times balked at such a move.
Zerr said the bill provides “reasonable” caps to the wide-used incentives.
“To cut the caps too low is to decimate these programs,” Zerr said. “That’s an unproductive strategy. These two programs are important tools for redevelopment of blighted and historic areas and development of affordable housing.”
House Speaker Tim Jones, R-Eureka, told reporters that the bill allows historic preservation and low-income tax credits to remain viable options for development.
“There’s a variety of different voices that are interested and that utilize those programs,” Jones said. “And many of them would tell you that we have preserved the programs and they can still remain viable for the state.”
State Sen. Will Kraus, R-Lee’s Summit, said the Senate has “typically not passed new programs without reforming the ones that are out there.” But he added that Zerr’s bill “is close to what we could potentially get done this year.”
“I believe that we can move the ball forward at getting caps at reasonable levels and we’ll continue to debate tax-credit programs in the years to come,” said Kraus, who added that some new programs may provide the state a return on its investment.
But at least one senator found fault with Zerr’s bill.
State Sen. John Lamping, R-Ladue, said the fact that members of the House -- and some members of the Senate -- are willing to lower the cap for the low-income housing tax credit “speaks to the idea that if the program were perfect and didn’t need to be rolled back, you would never agree to capping it.”
But Lamping said the House is only willing to cut programs “in exchange for the creation of a series of brand new programs.” And Lamping added that he’s worried the new incentives will be “inefficient.”
“The House is willing to say ‘look, we’ll acknowledge the fact that low-income housing and historics should be capped, but only in exchange for the creation of new programs,” Lamping said. “To me that’s horse-trading. That’s not making good policy.”
Indeed, Zerr said the bill should act as a starting point for discussion among members of both chambers.
“We wanted to stop going around in circles,” Zerr said. “I can’t imagine any House bill being just taken up and passed by the Senate. Just the nature of the beast. So a conference committee will be where we hash it out.”
Jones added that he believed “the two sides are so close that if the Senate gave Rep. Zerr’s bill an up or down vote, it would easily pass.”
Asked if that would actually happen, Jones repeated, “If they gave it an up or down vote, it would easily pass.”