Commission Approves Tax Credits

Don’t know how much we will get here in the City — CJ

via PoliticMO.com

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COLUMBIA, Mo. – After a three-month delay, the Missouri Housing Development Commission released funding for $137 million in low-income housing tax credits that were withheld last year as a part of a deal orchestrated by Gov. Jay Nixon to pass a tax credit package in an attempt to lure a new Boeing line to St. Louis.

At the time, Nixon successfully pushed legislation that would allow for up to $150 million annually in new tax credits targeted at the aerospace industry – specifically Boeing, which was mulling St. Louis as a place to locate its new 777x commercial airliner production line. To get that through the General Assembly without a Senate filibuster, Nixon negotiated an agreement with conservative stalwarts to delay issuing the tax credits until this week, so the commission would be able to weigh whether Boeing would use the credits and whether a tax credit reform measure had made its way through the legislature.

Boeing ultimately chose against locating its new line in Missouri, and the legislature has not acted on tax credit reform, and on Friday, the MHDC moved to release the millions in tax credits for low-income housing developers.

The delay drew criticism from Sen. Jamilah Nasheed, D-St. Louis, and Lt. Gov. Peter Kinder, a Republican, who cited concerns about low-income residents having access to housing and developers being delayed in their projects. Kinder, a member of the commission, said after the meeting on Friday that his criticism has been about more than just the tax credits.

“The governor has subverted the independence of the commission and devastated the credibility of the commission with lenders, others in the financial community, and with developers who are looking to other states to do business in,” he said. “It is clear the governor has a regime of unrelenting hostility to this commission, and people notice that.”

State Treasurer Clint Zweifel, a Democrat and another member of the commission, said the delay was just part of the process the commission goes through in approving tax credits, considering any number of factors – including other tax credits.

“Obviously it is not an ideal situation to delay projects when they’re in the middle of the process, but that’s what happened and we’ve moved along and they were approved within 100 days,” he said. In direct response to Kinder’s criticism, Zweifel added, “I was told very clearly by the governor’s office that there was a compromise established between some Senators and his office that would allow them to move forwarded on the legislation to attempt to attract Boeing, but delay those credits for a set period while the debate happened. Is it an ideal situation? No. But it seems like a responsible result.”

The move comes just days after Republican State Auditor Tom Schweich issued a scathing audit of the program, claiming that for every dollar of the $144 million spent on the low-income housing tax credit in 2013, only 42 cents went to building actual housing. The remainder of it goes to federal taxes, firms, and investors. He was also critical of the economic impact, noting that the credit only created 63 jobs, or approximately $61,000 per unit of housing or $2.3 million per job.

Schweich recommended that the state mull making the tax credits refundable, using a direct appropriation to build low-income housing, and reduce the number of hers over which the tax credits are spread (currently dispersed in pieces over 10 years).

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