The Tax Credit Review Commission last week unveiled its proposals for trimming state expenditures on tax credits.

Under the commission’s plan, presented Nov. 30, approximately $220 per year in tax credits would be saved for the state’s budget.

The biggest cut would be to the historic preservation tax credit that has been used for major redevelopment projects in Missouri’s larger cities.

It suggested reducing the cap on the tax credit by nearly half, from $140 million to $75 million.

St. Louis Mayor Francis Slay said the tax credit has been key for revitalizing the city’s downtown area.

“As a mayor, I certainly understand the economic realities of what’s happening not just in my city, but the state of Missouri and all over the country. Having said all that, the historic tax credit in particular has really been a tremendous asset to the city of St. Louis,” said Slay.

The commission did not include a proposal pushed by a few senators for the legislature itself to control spending on tax credits through the annual appropriations process.

Instead, the commission proposed that the legislature review continuing specific tax credit programs every six years.

“[That six years] would give both the legislature and the administration plenty of time to review some of these credit programs, test their efficiency, see if improvements are being made,” said Commission Co-Chair Chuck Gross, “If the shortened list…continues to perform, they can be reinstated and extended for another period and some additional legislature could review it down the road.”

The report also recommends eliminating 28 tax credit programs and trimming down another 30 to make the state’s tax credit programs more efficient.

In its report, the commission said they expect the total savings to be $220 million if the legislature approves their recommendations. The savings would help decrease the expected $400 million gap in the fiscal year 2012 budget.

The governor created the commission earlier this year after his call for scaling back tax credits hit a brick wall in the legislature. House leaders refused to take up the matter saying tax credits are an important tool in economic development for the state.

– Missouri Digital News