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Tax Credit Reform

From the desk of Senator Jason Crowell:

Missouri Sets New Record in Tax Credit Spending for Fiscal Year 2012, Sen. Jason Crowell Calls for Reform

JEFFERSON CITY – State Sen. Jason Crowell, R-Cape Girardeau, today renewed his calls for tax credit reform following the release of figures from the Missouri Department of Revenue showing the state set a new record for tax credit redemptions in Fiscal Year 2012 of $629 million. The amount surpassed the previous record of $585 million from Fiscal Year 2009.

As the state made drastic cuts to its budget, notably in education funding, it redeemed more than $629 million in tax credits, on top of the more than ONE BILLION dollar unfunded liability the Department of Revenue says we owe in currently issued but yet redeemed tax credits.

“We just spent the last session crafting one of the most difficult budgets in decades. The public got to really see many lawmakers’ priorities, and it wasn’t pretty,” said Sen. Jason Crowell. “Members of the House proposed taking away health care for blind people. The governor wanted to gut higher education for the third year in a row. Yet there was almost zero discussion about reforming tax credits, which cost taxpayers more than half a billion dollars. It’s madness.”

Tax credit redemptions have grown over the last decade, from $143 million in 1999 to more than $629 million last year. The two largest tax credit programs are Low Income Housing and Historic Preservation. For Fiscal Year 2012, Missouri spent $164 million on Low Income Housing tax incentives, more than the budget for the Department of Conservation and the Department of Agriculture combined.

“We’re spending hundreds of millions of dollars of taxpayer funds a year to line the pockets of a handful of wealthy land developers,” said Sen. Crowell. “But reports have consistently shown these credits do not create the jobs we’ve been promised and have a negative return on investment. We know they’re a bad deal, and yet last week, the St. Louis Cardinals’ organization asked for $113 million in state and local tax incentives over 25 years to build an entertainment area called Ballpark Village in downtown St. Louis. Our schools are underfunded. Our roads are crumbling. But taxpayers are supposed to cough up $113 million so one of the most successful major league baseball teams in the country can build a Ballpark Village that they said they would years ago without taxpayer subsidies when taxpayers gave them tens of millions to build their new stadium.”

“Lawmakers must stand up to the special interests that have hijacked the General Assembly and enact meaningful tax credit reform,” Sen. Crowell continued. “We’re doing long-term damage to the fiscal stability of our state. We’re digging ourselves into a hole we will struggle for decades to get out of. We need to address the elephant in the room. We need to start fixing what is clearly a broken tax credit system and a misalignment of our priorities.”

Stunning that Missouri continues to give away half-a-billion in tax dollars to cronies and pals.  To hell with education and to hell with the roads (although I have MAJOR problems with MoDot waste!), let’s save them historimacal buildings, pay for ballpark village, upgrade the Jones dome!

http://www.senate.mo.gov

 

 

 

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Posted by on August 29, 2012 in Government Waste, Taxes

 

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Jason Crowell: Senate Passes a Taxpayer First Jobs Package

By Missouri State Senator Jason Crowell (jcrowell@senate.mo.gov)

Attention Shifts to See What the House Does

h/t www.unfaircompetitiontradesecretscounsel.com

Over the past few weeks, I have shared with you how Missouri had the opportunity to make September’s Extraordinary Session a “Taxpayer and Missouri Jobs First” Special Session.  And because you demanded the right legislation be passed, the Senate listened and passed a bill that put job creation and the Missouri taxpayer first.  Your calls and emails led to the Senate scrapping the special interest first plan and passing Wednesday a jobs bill that begins making government live within its means and ties incentives directly to jobs created.

In the past, the state has subsidized activity because of promised jobs.  The special interests worked hard lobbying and giving to campaigns and convinced legislators that their tax credits would create jobs and enhance economic development.  This influence led to politicians giving out hundreds of millions of your hard-earned tax dollars to Low Income Housing tax credits, Historic Preservation tax credits and Land Assemblage tax credits.  However, while the awarding of tax credits increased over the last 13 years by 430.8 percent, equaling $545 million in 2011, the promised jobs have never been created.

That is because subsidized activity not tied to job creation fails to create jobs.  All those tax credits did was line the pockets of wealthy developers who, with the help of the politicians, conned the Missouri taxpayer.  It is clear that instead of job growth, Missouri’s return on investment was 21 cents for every dollar spent on Historic Preservation tax credits and 11 cents for every dollar spent on Low Income Housing tax credits.  “Give me a dollar and I will give you 21 cents or 11 cents back.”  You would never do that with your own money, and you should not allow the politicians to do such with your tax dollars.

Yet this has been the state’s economic plan, and it almost passed again.  For example, when redeveloping Schultz School Senior Housing in Cape Girardeau, we were told that if we subsidized the project, jobs would come and economic development would occur.  However, after spending $373,000 an apartment unit in Low Income Housing and Historic Preservation tax credits, permanent jobs did not.  Giving $16.7 million of your tax dollars to rehab 45 units for 11 – 21 cents on the dollar return is outrageous.  Over the course of the last two weeks there was an awakening that occurred with State Senators; they listened to your demands for responsible use of your hard earned tax dollars.  “We must tie incentives to job creation, not activities that may or may not create jobs.”

The removal of $300 million in Aerotropolis warehouse tax credits from the special session is acknowledgement of this key principle.  It is wrong, with our country facing massive manufacturing job losses to China, to make the central component of a “Made in Missouri” jobs plan the subsidization of the importation of China-made goods.  The battle now goes to the House where House leaders, who put their campaign accounts above Missourians, have said we must give $300 million to China importation warehouses. [Emphasis Added]

The bill that passed the Senate, which House leaders oppose, also included real tax credit reforms saving taxpayers $947 million over 15 years.  It caps and sunsets both the Historic Preservation tax credit and Low Income Housing tax credit.  The reforms also include clawbacks for failing to create jobs.  We have the ability to recapture any tax credits given out for noncompliance with the requirements, which specifically include creating the new jobs promised.  We have succeeded in the Senate, and with your continued support and help, we can win the House and beat back the special interests and developers House leaders covet.

Your humble blogger agrees that there has been great success, but yet, there still lurks great danger.  Buried in the verbiage of the Senate passed bill is language that describes how areas can be ‘blighted’ for their ‘potential’ to produce green energy.  Read here.

I implore you to continue to contact your Missouri Representatives asking them to kill this bill and start fresh with a bill to truly reform Missouri’s Tax Credit process… …with out the Green Energy / Agenda 21 Trojan Horse.

h/t senate.mo.gov

As always, I appreciate hearing your comments, opinions, and concerns.  Please feel free to contact me in Jefferson City at (573) 751-2459.  You may write to me at Jason Crowell; Missouri Senate; State Capitol; Jefferson City, MO  65101, or e-mail me at: jcrowell@senate.mo.gov or visit me on the web at http://www.senate.mo.gov/crowell.

 
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Posted by on September 17, 2011 in Free Market, Government Waste, Taxes

 

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Jason Crowell: A Special Session Has Been Called

By Missouri State Senator Jason Crowell (jcrowell@senate.mo.gov)

(Read Part 1 Here)

(Read Part 2 Here)

(Read Part 3 Here)

A special session has been called for the special interests starting Tuesday, September 6th, 2011.  The General Assembly usually meets January through May, but for extraordinary reasons, the Governor or General Assembly can call itself into session to pass what it deems as legislation that cannot wait until January.  In this case, September’s special session is nothing more than an effort to get right with fat cat campaign contributors at your expense, the Missouri taxpayer.  We cannot rebuild levees in Southeast Missouri or make farmers whole who lost everything in this year’s flood, but the politicians in Jefferson City want you to send $360 million in Aerotropolis tax credits to St. Louis.  There is literally something in the Governor’s special session call for every special interest, but nothing for the Missourians who have lost everything due to recent disasters across our state.

Senate and House Leadership spent the month of July in a backroom in St. Louis cutting a deal that is short on economic development, short on tax credit reform, but long on government handouts to special interests, creating a larger budget deficit that prevents us from funding priorities like education.  And Governor Nixon has yielded to this deal, endorsed it, and is doing his part to see to it that this September will be the “Special Interests First, Taxpayers Last” month by authorizing a special session to:

  • Give $360 million to developers for Aerotropolis with no taxpayer protections to get their money back if Aerotropolis does not create the jobs promised;
  • Exempt the construction of Data Centers from paying state and local sales taxes on utilities, machinery, and equipment;
  • Provide $10 million dollars a year to attract a billion dollar sports industry to host events in Missouri;
  • Reward those who avoided paying their taxes by giving amnesty to their wrongdoing; and
  • Take money from the poor and disabled via the Circuit Breaker Property Tax Relief at $55.8 million a year or $847.5 million over 15 years to pay for these new giveaways.

This deal that Senate and House Leadership cut behind closed doors, in a non-transparent inside job, and is now being pushed to be passed in special session, must not be allowed to pass.  Let me be clear, there is a path to do right by the Missouri taxpayer and I will fight to amend Leaderships’ bill to this end.  But if we are to succeed, it will take you demanding that the Jefferson City politicians put you first instead of their campaign donors.  It is my hope that together we are successful.

In this series we have been discussing the possibility of this special session, what is wrong with Leaderships’ back-room deal, what special interest provisions must be eliminated, and how we move forward with an economic development bill that puts Missouri first, not connected special interests and lobbyists.  There are several issues at play; the past few weeks we have discussed Aerotropolis tax credits, Historic Preservation tax credits and Low Income Housing tax credits.  As the special session approaches, we will continue to discuss all of these issues and the changes that must be made to Leaderships’ back-room deal.  You will probably learn more then you want to know, but it is vital that you know what is going on with your hard-earned tax dollars in Jefferson City.

To understand Leaderships’ bill, we must look at the smoke and mirror savings House and Senate Leadership are claiming in their bill.  To be able to give to their campaign contributing developers, they take the money from the Senior Citizen Property Tax Credit.  Known as Circuit Breaker Property tax relief, this tax credit gives certain senior citizens and disabled individuals who rent a $750-a-year credit when they file their taxes.  In 2011, Missouri gave out $55.8 million dollars in this tax credit to individuals who rented their homes.  Over the next 15 years, budget experts expect Missouri to spend $847.5 million for the Circuit Breaker tax credit for renters.  Leaderships’ bill ends this tax credit.

In my opinion, it does not make sense to give $55.8 million a year in property tax relief to people who do not pay property tax.  But it is even more ridiculous to give this money to developers in new tax credits while Missouri has failed to fully fund the foundation formula in 2012 by $177 million for K -12 education.  This is why Leaderships’ bill that gives the “savings” from ending the Circuit Breaker tax credit for renters to campaign contributors through Aerotropolis tax credits, Low Income Housing tax credits, and Historic Preservation tax credits is absurd and must not be allowed.

I believe now is the time to make fundamental positive reforms to Missouri’s tax credits system to protect taxpayers’ money.  We should subject awarding tax credits to a transparent process, where your representatives will have the chance to look at all the things we spend your tax dollars on and prioritize accordingly.  In Missouri, the method by which we set Missouri’s priorities is through the appropriation process.  Here we ask each of the state’s expenses to stand in line before your representatives in the General Assembly; requiring them to demonstrate why, with limited resources, they should be funded over others.  By making tax credits subject to the appropriations process, all state expenditures would now stand in line and prevent them from playing favorites by allowing those who receive tax credits to cut to the front of the appropriations line.

Now is the time for government to live within its means, not spend money it does not have by authorizing giveaway tax credits not tied to performance.  Together we have an opportunity to do right by the Missouri taxpayer but it will take you, the bosses of the politicians, to demand the right legislation is passed in this special session.  This can be done by taking back our state government and holding Senate and House Leadership accountable; shining a bright light on the problems with their back-room deal and watching them scatter like cockroaches from their current position.  Again, I need your help holding these politicians accountable.  They are counting on your silence.  I will continue in the coming weeks to examine further the issues and changes needed for a “Taxpayer First Special Session.”

To your humble blogger, it seems that fodder more apropos of a Special Legislative Session would be the termination of Missouri’s Income Tax in favor of a Consumption Tax.  Corporations don’t pay taxes anyway, so let’s move on from the hidden Corporate Tax to an equitable Consumption Tax that can help grow Missouri’s economic base.

h/t senate.mo.gov

As always, I appreciate hearing your comments, opinions, and concerns.  Please feel free to contact me in Jefferson City at (573) 751-2459.  You may write to me at Jason Crowell; Missouri Senate; State Capitol; Jefferson City, MO  65101, or e-mail me at: jcrowell@senate.mo.gov or visit me on the web at http://www.senate.mo.gov/crowell.

 
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Posted by on August 29, 2011 in Government Waste, Taxes

 

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Jason Crowell: Special Session??? – Part 3

By Missouri State Senator Jason Crowell (jcrowell@senate.mo.gov)

(Read Part 1 Here)

(Read Part 2 Here)

Low Income Housing Tax Credits

Over the last few weeks, there has been a lot of discussion from Jefferson City politicians suggesting the General Assembly will be called back into a special legislative session focused on “economic development.”  In fact, Senate and House leadership have spent much of July in a backroom in St. Louis cutting a deal that is short on economic development and short on tax credit reform, but long on government handouts to campaign donors and special interests in the name of “economic development” and “job growth.”  The General Assembly usually meets January through May, but for extraordinary reasons, the Governor or General Assembly can call itself into session to pass what it deems as legislation that cannot wait until January.

Senate and House leadership have recently announced a deal they cut behind closed doors in a non-transparent inside job, which is now being pushed to be passed in a special session.  This back-room deal must not be allowed to pass.  But let me be clear, there is a path to do right by the Missouri taxpayer, but it will take you demanding that Jefferson City politicians put you first instead of their fat cat campaign donors.  It is my hope that together we are successful.

In this series we are discussing where we are as to a possible special session, what is wrong with Leaderships’ back-room deal, what special interest provisions must be eliminated and how we move forward with an economic development bill that puts Missouri first, not connected special interests and lobbyists.  There are several issues at play; two weeks ago we discussed Aerotropolis tax credits for St. Louis Lambert Airport and last week we discussed Historic Preservation tax credits.  This still leaves Low Income Housing tax credits, Brownfield tax credits, Land Assemblage tax credits, and Circuit Breaker Property Tax Relief tax credits for owners and renters of real property.  We will discuss all of these issues and the changes that must be made to Leaderships’ backroom deal.  You will probably learn more then you want to know, but it is vital that you know what is going on with your hard-earned tax dollars in Jefferson City.

The next issue to look at is Low Income Housing tax credits.  In my opinion, for the most part, state tax credits in Missouri have become programs that favor special interests and wealthy developers who are generous to politicians’ campaigns.  And these special interests are well represented in the halls of the Capitol by lobbyists who continue to convince legislators that tax credits create jobs or enhance economic development when all they really do is line the pockets of their beneficiaries.  And as the influence of these special interests have grown, so too has the expansion of many tax credit programs.  In total, Missouri tax credits have increased over the last 13 years by 430.9 percent, equaling $545 million in 2011.  For Fiscal Year 2012, budget experts estimate the number of tax credits will grow to $639 million.

Low Income Housing tax credits were the largest giveaway in FY 2011 of Missouri’s sky rocking tax credits.  It is so large, Missouri ranks number 2 in the nation for giveaways in the name of building low income.  This is how the Low Income Housing tax credit scheme works; once approved by the Missouri Housing Development Commission (MHDC), Missouri provides a tax credit which can be used each year for 10 years by its allocated developers, to construct or acquire and rehabilitate rental housing.  In 2011, Missouri issued $156 million worth of tax credits to developers for affordable housing.  But Low Income Housing tax credits are streamed to the developer over 10 years, so taxpayers have actually been left to-date with an outstanding unfunded Low Incoming Housing tax credit liability (authorized or issued yet not redeemed) of $1.369 billion.  For example, stretched over 10 years, a developer who received $1 million in Low Incoming Housing tax credits this year is actually receiving $10 million at $1 million per year over the course of 10 years.  So in this case after already receiving $1 million from the taxpayers this year, the taxpayers are still on the hook for the remaining $9 million due to the developer over the next 9 years.

Above, I believe he meant “in the name of building low income housing”

To finance these housing units, the developer takes the tax credits and sells them for cash.  These tax credits DO NOT reduce a developer’s tax liability; they are “cash” vouchers, which the developer sells to others at a great discount.  This is why in a 2008 audit, the Missouri Auditor called Low Income Housing tax credits “costly” and “inefficient” because only 35 cents for every dollar go to development costs while the remaining 65 cents go to investors.  Leaderships’ bill does nothing address this fact.  Instead, Leaderships’ bill creates even more exceptions so that investors benefit first before a return on investment is realized for taxpayers.

In the same report, the Auditor also criticized the selection process of not documenting how projects are selected; highlighting that political influence impacts the selection of projects.  The Leaderships’ bill instead of reforming this process will give more influence to special interest developers and campaign contributors by allowing both the President Pro Tem and Speaker of the House the ability to appoint, without a confirmation process, members to the board that decides who receives Low Income Housing tax credits.  In addition, the law if passed will allow politicians to put those with conflicts of interest on this board because there are no conflict of interest provisions to prevent campaign contributors from buying their way onto this board.

Leaderships’ bill also boasts the establishment of new caps.  But the truth is there is no savings because of caps.  Tax credit expenses will actually be higher in the future than they were in 2011 because with the new board, they spend more than in 2011.  With a new board that will have no accountability measure for their spending, the result will be greater wasteful spending of your hard earned tax dollars.  The crony capitalism of this new board will cost taxpayers even more than they are paying now for this wasteful program and that is by design.

Let me provide you with recent abuses of this program that the Leaderships’ bill does nothing to reform and in fact, increase the outrageous amount of tax credits issued:

  • Schultz School Senior Housing project in Cape Girardeau used state Low Income Housing tax credits to rehabilitate 45 housing units.  The developer received $372,997 per unit.
  • Bethel Ridge Estates in Columbia received $320,476 per unit to rehabilitate 42 units and then was awarded another $339,588 per unit to rehabilitate another 42 units for Bethel Ridge Estates II.
  • Sycamore Village Apartments in Perryville received $207,500 per unit to rehabilitate 36 units.
  • Cape Riverview Apartments 2 in Cape Girardeau received $196,047 per unit to rehabilitate 43 units
  • Breezeway Estates in Perryville received $253,333 per unit to rehabilitate 15 units
  • West Court Manor in Cape Girardeau received $205,917 per unit to rehabilitate 48 units
  • Eagles Landing in East Prairie received $116,000 per unit to rehabilitate 30 units.

I believe now is the time to make fundamental positive reforms to Low Income Housing tax credits.  We should subject awarding tax credits to a transparent process, where your representatives will have the chance to look at all the things we spend your tax dollars on and prioritize accordingly.  In Missouri, the method by which we set Missouri’s priorities through the appropriation process where we ask each of the state’s expenses to stand in line before your representatives in the General Assembly; requiring them to demonstrate why, with limited resources, they should be funded over others.  By making tax credits subject to the appropriations process, all state expenditures would now stand in line and prevent favorites, by allowing those who receive tax credits to cut to the front of the appropriations line.

Again I ask, is there a State Senator out there willing to let ‘Leadership’ know that she or he will filibuster this Aerotropolis boondoggle along with any bill that takes more money from the Missouri taxpayer and gives it to wealthy campaign donors.  If this monstrosity is the main item on the docket, it is incumbent on representatives that considers themselves fiscally responsible to stand firmly in the path of its passage.

And, will Governor Jay Nixon let the Legislature know that he will veto such legislation, or will he further line the pockets of his donors.

As you know, I have concerns with awarding any new tax credits while cutting education budgets in Missouri.  As conceived by Senate and House leadership, Low Income Housing tax credits are a special interest giveaway to fat cat campaign donors.  But, if Low Income Housing tax credits are going to be about true economic development, we must make the changes we’ve discussed.  And if Senate and House leadership fight us and fight the elimination of these special interest provisions, then they must be defeated as well.

Now is the time for government to live within its means, not spend money it does not have by authorizing giveaway tax credits not tied to performance.  Together we have an opportunity to do right by the Missouri taxpayer but it will take you, the bosses of the politicians, to demand the right legislation is passed, if there is a special session.  This can be done by taking back our state government and holding Senate and House leadership accountable; shining a bright light on the problems with their back-room deal and watching them scatter like cockroaches from their current position.  Again, I need your help holding these politicians accountable.  They are counting on your silence.  In the coming weeks we will examine further the issues and changes needed for a taxpayer first special session.

As always, I appreciate hearing your comments, opinions, and concerns.  Please feel free to contact me in Jefferson City at (573) 751-2459.  You may write to me at Jason Crowell; Missouri Senate; State Capitol; Jefferson City, MO  65101, or e-mail me at: jcrowell@senate.mo.gov or visit me on the web at http://www.senate.mo.gov/crowell.

h/t senate.mo.gov

 
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Posted by on August 21, 2011 in Education, Taxes

 

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Senator Crowell: Special Session??? – Part 2

By Missouri State Senator Jason Crowell (jcrowell@senate.mo.gov)

(Read Part 1 Here)

Historic Preservation Tax Credits

 Over the last few weeks, there has been a lot of discussion from Jefferson City politicians suggesting the General Assembly will be called back into a special legislative session focused on “economic development.” In fact, Senate and House leadership have spent much of July in a backroom in St. Louis cutting a deal that is short on economic development and short on tax credit reform, but long on government handouts to campaign donors and special interests in the name of “economic development” and “job growth.” The General Assembly usually meets January through May, but for extraordinary reasons, the Governor or General Assembly can call itself into session to pass what it deems as legislation that cannot wait until January.

Senate and House leadership have recently announced a deal they cut behind closed doors in a non-transparent inside job, which is now being pushed to be passed in a special session. This back-room deal must not be allowed to pass. But let me be clear, there is a path to do right by the Missouri taxpayer, but it will take you demanding that Jefferson City politicians put you first instead of their fat cat campaign donors. It is my hope that together we are successful.

In this series we are discussing where we are as to a possible special session, what is wrong with Leaderships’ back-room deal, what special interest provisions must be eliminated and how we move forward with an economic development bill that puts Missouri first, not connected special interests and lobbyists. There are several issues at play; last week we discussed Aerotropolis tax credits for St. Louis Lambert Airport. There still remains Historic Preservation tax credits, Low Income Housing tax credits, Brownfield tax credits, Land Assemblage tax credits, and Circuit Breaker Property Tax Relief tax credits for owners and renters of real property. We will discuss all of these issues and the changes that must be made to leaderships’ backroom deal. You will probably learn more then you want to know, but it is vital that you know what is going on with your hard-earned tax dollars in Jefferson City.

The second issue is Historic Preservation tax credits. In my opinion, state tax credits in Missouri have become programs that favor special interests and wealthy developers who are generous to politicians’ campaigns. And these special interests are well represented in the halls of the Capitol by lobbyists who continue to convince legislators that tax credits create jobs or enhance economic development when all they really do is line the pockets of their beneficiaries. And as the influence of these special interests have grown, so too has the expansion of many tax credit programs. In total, Missouri tax credits have increased over the last 13 years by 430.9 percent, equaling $545 million in 2011. For Fiscal Year 2012, budget experts estimate the number of tax credits will grow to $639 million.

Historic Preservation tax credits make up one of the largest pieces of Missouri’s sky-rocking tax credits. Missouri ranks number 1 in the nation for giveaways in the name of historic preservation having issued $107 million in 2011. Over the last 10 years, Missouri has given out more than $1 billion in Historic Preservation tax credits. [Emphasis Added]

Missouri provides developers with a tax credit for approved development costs associated with qualified rehabilitation so long as it falls under certain lose parameters to be considered historic. To finance these projects, the developer takes the tax credits and sells them for cash.

Tax credits, however, go through a different process than most expenditures of state money; they do not go through the normal legislative process of appropriations. Instead, the General Assembly sets the rules in law of how Historic Preservation tax credits are issued. As part of the special session, House and Senate leadership made a deal to rewrite those rules and are cynically calling it tax credit reform.

Leaderships’ bill expands what development costs can be covered by Historic Preservation tax credits. That is, developers could receive more of your money resulting in fewer projects. Horribly so, under the label of reform, their bill would strip government oversight and accountability of your hard-earned tax dollars. Leaderships’ bill prevents the Department of Economic Development (DED) from independently reviewing eligibility costs and expenses of projects receiving tax credits; instead, they will just have to accept whatever is submitted by the developer’s own accountant. A limited audit can only be done after all tax credits have been issued and the developer has already taken your tax dollars.

Silly me. I thought we had elected Republicans in Missouri to lead forward in the fight for Fiscal Responsibility and Accountability to the People.  Sounds like the establishment Republicans leading the MO House and Senate are still more interested in lining their pockets and staying in power.

I believe now is the time to make fundamental positive reforms to Historic Preservation tax credits. We should subject awarding tax credits to a transparent process, where your representatives will have the chance to look at all the things we spend your tax dollars on and prioritize accordingly. In Missouri, the method by which we set Missouri’s priorities in the appropriation process. Through this process, we ask each of the state’s expenses to stand in line before your representatives in the General Assembly; requiring them to demonstrate why, with limited resources, they should be funded over others. By making tax credits subject to the appropriations process, all state expenditures would now stand in line and prevent favorites, by allowing those who receive tax credits to cut to the front of the appropriations line.

True reforms to Historic Preservation tax credits must also include strong policing and clawbacks when a developer fails to provide an economic return to the state. Leaderships’ bill prevents DED from auditing developer expenses before issuing tax credits and prevents clawbacks on the individual developers receiving them. We must have an efficient way to get your money back. Reform must include personal guaranties so the developer is on the hook to repay the state when tax credits are misused, not just his or her shell corporation as Leaderships’ bill provides.

As you know, I have concerns with awarding any new tax credits while cutting education budgets in Missouri. As conceived by Senate and House leadership, Historic Preservation tax credits are a special interest giveaway to fat cat campaign donors. But, if Historic Preservation is going to be about true economic development, we must make the changes we’ve discussed. And if Senate and House leadership fight us and fight the elimination of these special interest provisions, then they must be defeated as well.

Now is the time for government to live within its means, not spend money it does not have by authorizing giveaway tax credits not tied to performance. Together we have an opportunity to do right by the Missouri taxpayer but it will take you, the bosses of the politicians, to demand the right legislation is passed, if there is a special session. This can be done by taking back our state government and holding Senate and House leadership accountable; shining a bright light on the problems with their back-room deal and watching them scatter like cockroaches from their current position. Again, I need your help holding these politicians accountable. They are counting on your silence. In the coming weeks we will examine further the issues and changes needed for a taxpayer first special session.

As always, I appreciate hearing your comments, opinions, and concerns.  Please feel free to contact me in Jefferson City at (573) 751-2459.  You may write to me at Jason Crowell; Missouri Senate; State Capitol; Jefferson City, MO  65101, or e-mail me at: jcrowell@senate.mo.gov or visit me on the web at http://www.senate.mo.gov/crowell.

h/t senate.mo.gov

 
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Posted by on August 13, 2011 in Government Waste, Taxes

 

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Senator Crowell: Special Session??? – Part 1

By Missouri State Senator Jason Crowell (jcrowell@senate.mo.gov):

Over the last few weeks, there has been a lot of discussion from Jefferson City politicians suggesting the General Assembly will be called back into a special legislative session focused on “economic development.” In fact, Senate and House leadership have spent much of July in a backroom in St. Louis cutting a deal that is short on economic development, short on tax credit reform but long on government handouts to campaign donors and special interests in the name of “economic development” and “job growth.” The General Assembly usually meets January through May, but for extraordinary reasons, the Governor or General Assembly can call itself into session to pass what it deems as legislation that cannot wait until January.

Senate and House leadership have recently announced a deal they cut behind closed doors in a non-transparent inside job, which is now being pushed to be passed in a special session. This back room deal must not be allowed to pass. But let me be clear, there is a path to do right by the Missouri taxpayer but it will take you demanding that Jefferson City politicians put you first instead of their fat cat campaign donors. It is my hope that together we are successful.

In this series we will discuss where we are as to a possible special session, what is wrong with leaderships’ backroom deal, and what special interest provisions must be eliminated and how we move forward with an economic development bill that puts Missouri first, not connected special interests and lobbyists. There are several issues at play; Aerotropolis tax credits for St. Louis Lambert Airport, Historic Preservation tax credits, Low Income Housing tax credits, Brownfield tax credits, Land Assemblage tax credits, and Circuit Breaker Property Tax Relief tax credits for owners and renters of real property. We will discuss all of these issues and the changes that must be made to leaderships’ backroom deal. You will probably learn more then you want to know, but it is vital that you know what is going on with your hard earned tax dollars in Jefferson City.

The first area is Aerotropolis. Aerotropolis is an idea conceived by Greg Lindsey in his book Aerotropolis: The Way We’ll Live Next and is defined as an “international trade zone that uses multiple modes of transportation to move goods.” In order to create this trade zone, a large amount of warehouse space is needed to store products and this is where the state is being asked to spend your tax dollars. Supporters of Aerotropolis in St. Louis claim that in order to get investors to build this warehouse space and then to attract air carriers to St. Louis, Missourians must give out $360 million in tax credits to developers and the airport.

Really. Sources say that the advent of the effort to open the Aerotropolis didn’t even include taxpayer subsidies.  The push for taxpayer was later added by Missouri Legislators, certain Mayors and County Executives as well as well connected cronies.

Aerotropolis though, as written in leaderships’ bill, is not about economic growth but is a handout to rich campaign contributors. Requirements, such as for a developer to qualify for Aerotropolis tax credits, warehouses must be built on 100 contiguous acres of land or in specially designated areas mean that only a select few developers who donate massive amounts to politicians, could qualify for these tax credits. If that wasn’t enough, according to real estate company CB Richard Ellis, there is currently over 18 million square feet of vacant warehouse space already developed in St. Louis and no need for new warehouse space. However, as currently written in leaderships’ bill, 80 percent of Aerotropolis tax credits will go to new construction, rewarding the politically connected developers while hurting business owners trying to lease their existing space; this must be changed. The leaderships’ bill even gives the Mayor of St. Louis and St. Louis County Executive the power to be the gatekeeper to these state tax credits. The Mayor of St. Louis City and Executive of St. Louis County must not be allowed to spend state dollars unilaterally without any accountability or oversight. Finally, the leaderships’ bill is not tied to an increase in international trade. Strong clawbacks and taxpayer protections must be included in order to ensure that Aerotropolis tax credits do not become a taxpayer funded “Air Bridge to Nowhere” boondoggle.

As you know, I have concerns with awarding any new tax credits while cutting education budgets in Missouri. As conceived by Senate and House leadership, Aerotropolis tax credits are a special interest giveaway to fat cat campaign donors. But, if Aerotropolis is going to be about true economic development, we must make the changes we’ve discussed. And if Senate and House leadership fight us and fight the elimination of these special interest provisions, then they must be defeated as well.

Filibuster anyone? McFly?

Now is the time for government to live within its means, not spend money it does not have by authorizing give away tax credits not tied to performance. Together we have an opportunity to do right by the Missouri taxpayer but it will take you, the bosses of the politicians, to demand the right legislation is passed, if there is a special session. This can be done by taking back our state government and holding Senate and House leadership accountable; shining a bright light on the problems with their backroom deal and watching them scatter like cockroaches from their current position. Again, I need your help holding these politicians accountable. They are counting on your silence. In the coming weeks we will examine further the issues and changes needed for a taxpayer-first special session.

It was suggested to me that if one of our fine Conservative Senators would plan to Filibuster the bill, we may not have to pay for a special session this year.  Unless there is some serious tax credit reform on the block, I have to agree that forgoing the special session would be the best option.

As always, I appreciate hearing your comments, opinions, and concerns. Please feel free to contact me in Jefferson City at (573) 751-2459. You may write to me at Jason Crowell; Missouri Senate; State Capitol; Jefferson City, MO 65101, or e-mail me at: jcrowell@senate.mo.gov or visit me on the web at http://www.senate.mo.gov/crowell.

 
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Posted by on August 6, 2011 in Free Market, Taxes

 

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