OUR OPINION: Tax credit panel performs admirably
Sunday, December 5, 2010
Although commenting on the recommendations of the Tax Credit Review Commission would be premature, commending its effort is timely.
Commissioners this week issued a 54-page report of the 61 tax credit programs offered by the state.
They concluded Missouri government could save $220 million in the next five years by eliminating 28 tax credits programs and improving the operation of 30 others.
Tax credits are used by governments largely as an economic development tool. The theory is tax forgiveness serves as an incentive to lure and retain employers. The downside is less revenue flows to taxing jurisdictions.
Missouri offers tax credit programs pertaining to agriculture, the environment, financial services, low income housing, historic preservation and other areas.
As Gov. Jay Nixon and lawmakers toiled to balance the state’s budget during the last two legislative sessions, attention focused on the cost-effectiveness of the tax credit programs, which reduced state revenues last year by about $521 million.
After lawmakers indicated reluctance to act hastily on tax credits before the session ended in May, Nixon in July appointed a commission made up of more than two dozen business, community and legislative leaders. Their charge was to analyze the issue and make recommendations before lawmakers convene again in January.
The recent report represents the culmination of their exploration and effort.
Readers who choose to read it — available on the Web at tcrc.mo.gov — will find it both detailed and comprehensive.
The commission subdivided itself into a number of committees and held both public hearings and open meetings. They heeded the governor’s advice to avoid undermining the state’s AAA bond rating or disrupting projects in progress.
We commend the commission for its thorough analysis and for respecting its role.
Appointed commissioners recommend; elected legislators decide.
The commission has offered what it characterized as “fact-based recommendations ... for improvements.”
The report on tax credits will ease the task of lawmakers when they convene in January and renew discussion and debate of the issue.