Area lawmakers praise, criticize Housing commission action on tax credits

The Missouri Housing Development Commission’s decision to cut low-income housing tax credits has sparked praise and criticism from area lawmakers.

State Rep. Holly Rehder, R-Sikeston, praised the action. State Reps. Donna Lichtenegger, Rick Francis and state Sen. Wayne Wallingford criticized the move, arguing it bypasses the legislative process.

State Rep. Kathy Swan, R-Cape Girardeau, didn’t endorse the commission’s action but said she believes the board acted “out of frustration” over the Legislature’s inability to reform the tax-credit system.

Swan said lawmakers often “talk and talk” without taking action on legislative issues.

She suggested the commission’s action might “kick start” lawmakers into revamping the system.

Donna Lichtenegger

A governor-appointed committee unveiled a plan in June to change tax-credit programs, including converting low-income housing tax credits to a low-interest loan program for affordable housing construction.

Lichtenegger, Francis and Wallingford said the housing commission’s action last week amounted to enacting policy that should be left to the Legislature.

Lichtenegger, R-Jackson, said, “State commissions should not be making policy.”

The Missouri Housing Development Commission (MHDC) voted Friday to stop issuing low-income housing tax credits. Gov. Eric Greitens is a voting member of the commission and voted with the majority, arguing it saved millions of dollars and demonstrated that “politics as usual is over.”

Former state senator Jason Crowell, appointed to the commission in September, is a longtime critic of tax credits. He said the commission under state law has the authority to decide whether to issue state tax credits for low-income housing projects.

Holly Rehder

Crowell said the program is inefficient and costly. For every $1 tax credit, only 42 cents goes to housing projects, Crowell said Monday.

“It is insane to defend this program,” he said.

Crowell said the state previously issued $16 million in tax credits for a 45-unit housing redevelopment project in Cape Girardeau. Crowell said that amounted to $372,000 in taxpayer money for each apartment unit.

Crowell questioned whether lawmakers “are going to stand up for the Missouri taxpayers or the developers and the money lenders.”

Missouri, he said, has a $1.1 billion “hole in its budget” while at the same time the state is authorizing tax credits for a number of programs.

Rick Francis

Meanwhile, the General Assembly “does nothing” to rein in tax credits, Crowell said.

Lawmakers, he said, “bitch and complain” but don’t tackle the problem. He criticized Lichtenegger and other lawmakers, who he said tell constituents they want to reform the tax-credit system but “let the money flow on the back side.”

He praised Greitens for his actions to put a halt to wasteful spending.

But Lichtenegger said, “The governor is not elected to do the job of the Legislature.” The MHDC’s action is “the wrong way to go” in addressing the tax-credit issue.

Wallingford, R-Cape Girardeau, agreed.

Wayne Wallingford

“It does concern me because that (bypassing the legislative process) as been happening at the federal level for sometime,” he said. “I think it sets a bad precedent.”

Francis, R-Perryville, said, “I think it is something the Legislature should deal with.”

Francis and other lawmakers said some tax credits have been good for economic development, others have not.

Lichtenegger said she opposes eliminating all tax credits for low-income housing.

Without such tax credits, developers can’t afford to build housing and charge only $375 a month for a two-bedroom unit, she said.

Such affordable housing is needed for many of Missouri’s elderly, she added.

Lichtenegger said the solution is not to eliminate the program, but to “fix it through the budget process.”

All five lawmakers agreed the Legislature should take budgetary control of state tax credits.

Lawmakers have no control over tax credits issued by various agencies and departments of state government, Swan said.

For the past several years, Swan has introduced legislation that specifies all new and existing tax credits must be approved by lawmakers as part of the budget process. But each year, the bill has failed to pass.

The area lawmakers said tax credits need to be considered as part of the annual appropriations process in the General Assembly. In addition, they want to prevent developers from selling tax credits to other developers.

Swan suggested lawmakers need to look at capping the amount of tax-credit dollars that can be appropriated in a given budget year.

Rehder welcomed the actions of the MHDC, calling it “one of the single most historic changes that has happened” in state government.

“It is going to help our budget process,” Rehder said, adding reining in tax credits will provide state government with more revenue.

The Scott County state representative said Missouri issues as much as $600 million annually in a variety of tax credits.

“It is not good for the taxpayer,” Rehder said. “We need program reform.”

mbliss@semissourian.com

(573) 388-3641