This article first appeared in the St. Louis Beacon, May 16, 2012 - The Missouri Senate approved legislation lowering the cap on the historic preservation tax credit, an incentive used extensively to refurbish buildings in the St. Louis area. But that plan may be dead on arrival in the Missouri House.
The Senate initially took up legislation on Wednesday aimed at avoiding the pitfalls that occurred during the Mamtek controversy in Moberly, Mo. The reconfigured bill included a provision lowering the state's cap for the historic preservation tax credit program from $140 million to $75 million.
Other provisions include incentives to lure sporting events to Missouri, as well as one-year extensions of “benevolent tax credits” to spur donations to agencies such as food banks and pregnancy resource centers.
The temporary extensions on the so-called “benevolent” tax credits were key. As Sen. Jason Crowell, R-Cape Girardeau, noted on the Senate floor, forcing lawmakers to reauthorize those popular incentives was a way to continue a broader effort to restructure the state’s tax credits.
Crowell – who is term-limited and cannot run for re-election – was one of numerous lawmakers who unsuccessfully pushed for a broad overhaul of tax credits last year. That included expiration dates on the historic and low income housing tax credit incentives.
“Where we find ourselves is this continuance. Not a settlement and an indefinite delay of the issue,” Crowell said. “This issue of global tax credit reform, although I will not be here, is not going to be pushed off for six years. And it’s not going to be pushed off anywhere.”
State Sen. Jim Lembke, R-Lemay, handled the bill on the Senate floor. He said that while the package doesn’t go as far as he’d like, it’s a way of cutting tax credits while continuing to push for broader changes. He also said the sporting event tax credit could help spur economic activity if a major event lands in a city.
Lembke said that the low-income tax credit would be part of future discussions about whether to reconfigure tax credits.
“As we continue to have strain on our budgets in Missouri, we’re going to have to take a look at all of these tax credits,” Lembke said. “If it had been my will and it had been the perfect bill, [the low income housing tax credit] would have been addressed also.
“We saw an opportunity to take a small step forward in reform, and that’s what we did with putting a $75 million cap on historic tax credits,” Lembke said.
Sen. Joe Keaveny – a St. Louis Democrat who was one of several lawmakers to vote against the bill – unsuccessfully offered an amendment to forestall lowering the cap for the historic tax credit. He said the historic tax credit program, which has been used on large and small projects in the city, was being unfairly singled out.
“This is all being orchestrated,” Keaveny said. “They’re holding the benevolent tax credits hostage until there’s some give-and-take on historic and low income [tax credits]. And they’re going to do it every year.”
Keaveny wasn’t the only one who objected to the bill. Deb Sheals of the Alliance for Investment, Jobs and Preservation in Missouri said in a statement that it’s unfortunate “that a few senators feel the need to hold good social programs hostage for this.”
Sheals continued: “At a time when unemployment in the construction industry is well above 14 percent, we need programs that stimulate construction activity, and we all know the historic credit does that quite well.”
Jeff Rainford, chief of staff to St. Louis Mayor Francis Slay, said the city opposes a lower cap for historic tax credits, which have been used extensively downtown.
"Obviously, we've got our team working against it," Rainford said. "We're on it, we know about it, we're dealing with it.'”
"We're not going to get exercised about it until the House takes it up,” he added.
Prospects dim in the House
Indeed, the bill faces a steep climb in the Missouri House, which balked last year at efforts to place expiration dates on the tax credits for historic preservation and low-income housing.
Even the bill’s House handler – Rep. Jason Barnes, R-Jefferson City – was critical of the legislation out of the Senate. The first-term lawmaker said that the bill dealt with provisions aimed at providing more safeguards before allocating resources toward economic development projects. And the bill’s title, he said, was not written to include changes to tax credit programs.
“The plain fact is that the title is stated solely for ‘due diligence in economic development,’” Barnes said. “All of those amendments go beyond the scope of the title, making the bill unconstitutional. I have no interest in picking up a bill that I believe is unconstitutional.”
While he hadn’t read the specifics of the legislation, House Majority Leader Tim Jones, R-Eureka, noted that the House had agreed to a $90 million cap for the historic preservation tax credit program during last year’s special session.
“Historically … the House has been at $90 million,” Jones said. “So I don’t know why we’d retreat from our position on that. You know, apparently in the 48 hours that are left in session, now we’re going to engage in wholesale economic development negotiations suddenly. I think if we’re going to do that, we’re going to have to have a global discussion about what we’re going to accomplish.”
For his part, Lembke said both sides would have enough time to hash out differences in a conference committee. Session ends at 6 p.m. on Friday.
Beacon political reporter Jo Mannies contributed information for this article.
