Missouri Tax Credit News
The State of the State and Predictions for tax credits in Missouri - January 05, 2011
Tonight (1/5/11) Missouri Governor Jay Nixon will give his state of the state message. The Missouri legislature is going into session and the real work to deal with the budget begins. The Missouri tax credit programs have all been lambasted by the Governor and have received extensive media coverage. The majority of people we speak to feel that the programs are facing dramatic cutbacks. We have a contrarian view and feel that little if anything will happen to the Missouri tax credit programs via legislation. Here is why:
Most of the "noise" we are hearing about Missouri tax credit programs is coming from Governor Nixon and a handful of legislators. Artificially amplifying this propaganda is the report of a commission appointed by Governor Nixon. Do you think a politician would select a group that would issue a report that doesn't support his agenda? The commission was led by Steve Stogel. Steve is one of the brightest tax credit guys out there. He is also one of the biggest fundraisers for Governor Nixon. In order to appear bipartisan and objective, Chuck Gross was selected as another leader of the group. Chuck is a former Republican Senator. However, he was a very active opponent of the Missouri tax credit system while in office. It was clear from the start what his biases would be.
Reducing the Missouri tax credit programs may not be a priority. The Missouri Chamber of Commerce put forth its "Fix Six" list. Their constituents, the business community, have six items that they feel are vital to job growth in Missouri. None of the six are related to tax credits. There is a limit on how much can be accomplished in one legislative session, especially with so many new faces.
Even if we are right, life will not be great for Missouri tax credit constituents. The Governor was miffed he didn't get his way in the last legislative session, so he instituted an expanded review process for processing tax credits under the current programs. Tax credit certifications used to take 3 to 6 months to make their way through the Missouri Department of Economic Development and become tax credit certificates. Developer are now waiting 9 to 12 months. This delay is a major hardship for already financially stressed developers. They must now carry debt for the longer period while they wait to monetize their Missouri tax credit certificates.
The Republican dominated Missouri legislature is not inclined to follow the Governors direction. House Majority Leader Tilley has publicly criticized the above-mentioned commission's findings. He has also privately reminded commission members and supporters that the legislature, not the governor's commission, make the laws.
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