Disabled tax break depends on business bill

Several thousand Missouri residents with developmental disabilities could stand to benefit if state lawmakers can settle their differences and pass a bill creating new business incentives during a special legislative session.

The business incentives targeting such things as international exports and computer data centers have no direct connection to the disabled. Yet tucked into both the House and Senate versions of the massive bill is a little-publicized provision creating a tax break for donors to organizations serving the developmentally disabled.

Unlike the business incentives, which could cost the state tens of millions of dollars, the tax credits related to the developmentally disabled would cost the state nothing. That's because lawmakers are essentially using the state tax code to boost charitable contributions.

The proposal would authorize a 50 percent state tax credit for contributions to organizations that have state contracts to provide direct-care services for the developmentally disabled, so long as the group getting the donation pays the state an amount equal to the tax credit.

Here's an example of how it could work. If an organization receives $1,000 contribution, it would pay the state $500 and, in exchange, would get a $500 tax credit for the donor. That means the state would be out nothing, and the group would get to keep just half of the original donation. But the donor could claim the full $1,000 contribution as a federal tax deduction while also subtracting $500 directly off his or her state income tax bill.

The benefit to the donor is obvious. But supporters of the proposal say it could also benefit nonprofit groups serving the developmentally disabled by cultivating new contributors or encouraging regular donors to give more than they otherwise would be inclined to provide.

"People hear tax credit and it perks their interest, and then their heart takes over," said Sen. Bill Stouffer, R-Napton, who is sponsoring the proposed tax break.

"Once they get (prospective donors) in the door with tax credits, they can show them what they're doing, and people fall in love with these kids or the facility, and they contribute more," Stouffer said.

Missouri already uses a similar model to try to spur donations to residential facilities for children in the state foster-care system. That tax credit was created under a 2006 law sponsored Stouffer, and the Department of Social Services finalized the rules implementing tax credit the next year. Since the 2008 fiscal year, Missouri has issued 559 tax credits totaling nearly $1.8 million under the program, according to figures from the Department of Social Services.

The Missouri Baptist Children's Home has been one of the leading proponents of both the foster-care tax credits and developmentally disabled tax breaks. The organization also is one of the beneficiaries, because it operates group homes for several dozen foster children and an 8-bed home for developmentally disabled adults.

This year, the organization's Children and Family Ministries expects the state tax credit for foster care services to help generate about $500,000 of the nearly $1.1 million of contributions it anticipates receiving, said the ministries' president, Russell Martin. The organization's $10.5 million budget also includes money from endowments and from state payments for its services. But the tax credit program "has been essential to us," Martin said.

Those who want to adopt a similar tax credit for agencies serving the developmentally disabled hope that a surge in donations might help expand services to at least some of the people now on waiting lists to receive state-funded care. The Missouri Department of Mental Health says it has about 4,000 developmentally disabled people waiting for in-home services and about 300 waiting for spots in residential care centers.

Among those backing the proposed tax credit is state Rep. Jeff Grisamore, R-Lee's Summit, whose developmentally disabled daughter, Rebekah, died just a couple of weeks shy of her first birthday in 2002.

"Individuals with disabilities should be among those who receive the first portion of government funding, and instead they often have to fight for the crumbs off the table," said Grisamore, who is chairman of the House Committee on Disability Services.

He added: "This is a way to hopefully catalyze funding from the private sector to help offset state funding needs and shortfalls."

The proposed tax credit benefitting the developmentally disabled has drawn almost no debate in the Legislature, except for a brief discussion when a House amendment capped the program at $5 million of tax credits annually. Yet the program's immediate fate hinges upon that of the broader economic development bill to which it is attached. If it fails during the current special session, the tax break could be brought up again during the regular session that runs from next January to May.

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