The seven-member Missouri Housing Development Commission voted Nov. 17 to end the state’s low-income housing tax credit program, which helps fund new construction and rehabilitation of affordable housing.
The move affects Missouri’s 27-year-old program. The federal program is unaffected by this decision, though low-income housing developer Housing Plus LLC co-owners Debbie Shantz Hart and Becky Selle are concerned that the state links the two together.
“While one is held up, the other is held up,” Selle recently told Springfield Business Journal.
Gov. Eric Greitens sees the program as a drain of taxpayer money.
“Politicians spend millions of your money on projects that sound nice, but don't get results,” said Greitens, who’s also a commission member, in a news release.
In January, Greitens’ administration began a concerted effort to examine the efficacy of tax credits. According to findings by the Governor’s Committee on Simple, Fair and Low Taxes presented in June, Missourians redeemed more than $575 million in tax credits in fiscal 2016, with low-income incentives being the largest program at $101.9 million.
A 2014 report by former Missouri Auditor Thomas Schweich found the low-income credit helped build thousands of units for those in need, but did so inefficiently. The program had $144 million in redemptions in fiscal 2013. About 42 cents of every tax credit dollar issued went toward the construction of low-income housing, the report found, with the remainder going to syndication firms, investors or the federal government in the form of increased federal income taxes.
Missouri’s spending on the program also was described by the report as out of step with other states. At the time of the report, 10 states had a low-income credit, and the Show-Me State spent the most per capita – $28.60. No other state had more then $20 per capita and six spent less than $5.14. Today, there are 16 states with a low-income credit program, plus the District of Columbia.
“If you spend a hard-earned dollar, you expect a dollar of value,” Greitens said in the release, calling the program a fine idea that became a benefit for special interest groups. “And I believe that when it comes to your tax money, if the government spends a dollar, you should get your money's worth.”
Although he didn’t go into detail, Greitens pledged to work with both sides of the aisle to find an alternative to the program. The Governor’s Committee on Simple, Fair and Low Taxes recommended converting the low-income credit program into a low-interest loan program for affordable housing construction.
Other members of the Missouri Housing Development Commission are Lt. Gov. Mike Parson, state Treasurer Eric Schmitt, William Miller, attorney Jason Crowell and Jeffrey Bay. Miller could not be reached by deadline.
Missouri’s low-income credit program was used recently to build McClernon Villas, a five-building, 36-unit community for individuals ages 55 and older, developed jointly by Housing Plus and The Kitchen Inc.
Also, developers Pat O’Reilly and Denise Heintz were approved this year to build a senior housing project in Lebanon called Tower Village, with the use of $3.8 million in tax credits over a 10-year period.
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The move would come with a new property tax levied on residents of regional school districts.
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