JEFFERSON CITY -- Gov. Jay Nixon mobilized education leaders today to put pressure on the Legislature to pass his moribund proposal clamping down on state tax credits.
Surrounded by about 75 university and public school officials at a Capitol news conference, Nixon said that major cuts in tax credits are needed to help preserve dwindling tax revenue for public education.
"When revenues don’t match expenses, we have to make difficult choices," Nixon said. "That's why Missouri’s education leaders have joined with me today to call on the Legislature to pass comprehensive tax credit reform this year."
Education leaders present included Marcia Pfeiffer, president of St. Louis Community College at Florissant Valley. She said she supported "comprehensive review and reform" of tax credits.
"The citizens of Missouri expect and certainly deserve that each of their hard-earned tax dollars will be used to the greatest benefit," she said.
The state has 61 tax credit programs benefitting scores of projects, ranging from high-tech businesses to maternity homes.
Overall, the governor said, tax credits have ballooned in the last 10 years to $585 million, an increase of 86 percent.
He zeroed in on the two largest programs, which primarily help urban areas by underwriting projects sought by historic preservationists and housing developers.
The governor said Missouri ranks first in the nation in spending on historic preservation and second in spending on low-income housing tax credits. Top priorities such as education "must not be jeopardized by the rapid and unchecked growth" of those two tax credit programs, he said.
Nixon’s plan, unveiled in late March, would cap tax credits at $314 million a year, or 70 percent of the credits claimed last year. Tax credits also would be reorganized into six broad categories, which would each get a certain percentage of the credits. The Department of Economic Development would control the pursestrings.
Nixon, a Democrat, said the changes are needed to control costs and target projects with the most payback for the public.
The Republican-led Legislature has balked at the plan, saying it would give the executive branch too much power. And with less than a month left in the legislative session and no middle ground emerging, chances are growing slim that such major changes will pass.
House leaders criticized Nixon’s plan at a press conference immediately after the governor’s event. House Speaker Ron Richard, R-Joplin, predicted that no economic development bill would pass the General Assembly this year.
Expressing his frustration with both the governor and the Senate, Richard said that the push for changes to tax credit programs would bring instability to the "financial system."
The Republicans said that tax credit reform was moving too fast.
Majority Floor Leader Steve Tilley, R-Perryville, said that until there was a cost-benefit analysis of which programs worked and which didn't, it makes no sense to cap programs or make wholesale changes. The Republicans continued to call Nixon's proposal a "power grab."
"When you centralize power," Richard said, "it leads to political payoffs."
Tilley said that Nixon's proposal was "disingenuous" based on his previous support of tax credit programs.
"I think it's unfortunate that the governor has used education leaders from around the state as a prop," Tilley said.