Tax Credit Reform

Tax Credits

• • • • Dollar for dollar reduction in state taxes Missouri currently has 69 different tax credits Some can be sold and redeemed by individuals or corporations that have no interest or stake in the project for which the tax credits were issued.

Outside of the appropriation ovesight and control.

Tax Credit History

2006 2007 2008 2009 2010 2011

2012 2013

Fiscal Year 1999 2000 2001 2002 2003 2004 2005 Redeemed $142,953,469 $261,922,226 $297,750,752 $287,503,418 $308,720,438 $370,071,336 $426,797,418 $430,526,401 $499,543,365 $532,760,796 $584,526,191 $521,458,688 $545,145,614

$654,000,000 (Estimate) $685,000,000 (Estimate)

Return on Investment

Historic Tax Credits

21 cent return on every $1 invested

Low-Income Housing

11 cent return on every $1 invested

Early Childhood Education

$7 return on every $1 invested

Missouri’s Standing

State Support for Education

Only nine states contribute less to K-12 32 nd in per capita funding for K-12 45 th in per capita funding for higher education

Tax Credit Support (FY-09)

1 st in the nation in Historic Preservation Tax Credits 2 nd in the nation for Low-Income Housing Tax Credits

FY 13 Budget Issues

• • • • • With $685 million tax projected tax credits Formula under funded by $466 million Transportation funding cut by $60 million Career Ladder program eliminated Cuts continue in Parents as Teachers Program Higher education cut by $89 million and $16.9 million more in higher education scholarships.

One Example Tax Credit Reform

• • • • SB-548 (Sen. Purgason) Would place a sunset clause on all tax credits in Missouri Voted out of Ways and Means Committee Missouri has 69 different tax credit programs that equate to about $700 million in spending each year!

Has been estimated that this legislation could increase state revenues by $1.7 billion over the next 15 years.

Change the Conversation

• Ask Legislators to SUPPORT tax credit reform • Ask Legislators to SUPPORT SB 548 • Ask Legislators to put a higher priority on: – K-12 Education – Higher Education – Roads and Bridges