Mo. Senate panel votes to end renters’ tax break
Tuesday, March 12, 2013
By DAVID A. LIEB
JEFFERSON CITY, Mo. (AP) — Despite pleas from the poor not to do so, a Senate budget panel voted Tuesday to do away with a longtime tax break for low-income seniors and disabled residents who live in rented homes.
The legislation backed by Democratic Gov. Jay Nixon and Republican Senate leaders would eliminate a tax credit for about 104,000 low-income renters while leaving it in place for a slightly larger pool of homeowners. The $57 million in savings from the abolished tax break would be redirected to mental health care, nursing homes and home-based health and living services that could benefit the disabled and seniors.
The bill, which now goes to the full Senate, would implement a recommendation from a tax-credit review commission appointed by Nixon. That panel said the income tax break, which is intended to partially offset local property taxes, is not as necessary for renters because there is not enough evidence that landlords pass on the full cost of property taxes to renters.
But recipients of the tax break testified Tuesday that it helps them pay for utilities, medical bills, clothing and other daily living expenses.
“I ask you please not to pass this bill,” pleaded Charlotte Moten, 56, of St. Louis, who has a foot disability and a jaw condition that causes recurring tumors in her mouth. Moten said she gets about $500 from the tax credit, which she uses for her dental costs.
If the tax credit is repealed, “quite possibly it could endanger my life, because there are no resources I could use for satisfying the desperate need I have” to remove tumors, she told The Associated Press.
Among others testifying against the bill was Cory McMahon, 25, of St. Louis, who is blind and has cerebral palsy. He told senators that his $750 tax credit — the maximum allowed for renters — could help pay an outstanding ambulance bill, cellphone bill or buy clothing.
Even some of the potential beneficiaries of the legislation told senators they didn’t support it.
Nixon has proposed to allot $1 million from the abolished tax credit to the Missouri Area Agencies on Aging, which provide home-delivered meals, transportation and other services for seniors. But Catherine Edwards, executive director of an association for those agencies, said she would rather leave that money in the pockets of the people the agencies serve.
“That little bit of self-determination means a lot to a person to be able to buy an item they need,” she said.
The only person testifying in support of the legislation was Nixon’s budget director. But the plan also got support from some Republican senators.
Sen. Mike Parson, R-Bolivar, said he rents housing to others and questioned the necessity of the tax credit for several of his senior tenants.
“There are many, many people out there who receive money from this program who do not need it,” Parson said.
Nixon’s proposal is being sponsored by Senate President Pro Tem Tom Dempsey, R-St. Charles, and also is supported by Senate Appropriations Committee Chairman Kurt Schaefer, R-Columbia, both of whom opposed the repeal of the tax credit during a 2011 special session. The senators noted that the latest proposal would redirect the savings to services for seniors and the disabled whereas the earlier proposal did not.
Missouri has offered a state income tax break intended to offset the property taxes or rent payments of low-income seniors since 1973. That tax break was expanded in subsequent years to cover the disabled and the surviving spouses of deceased seniors. To qualify for the tax credit, individuals can earn no more than $27,500 for renters and $30,000 for homeowners. The maximum eligibility for married couples is $29,500 for renters and $34,000 for homeowners.
Homeowners can receive tax credits of up to $1,100 while renters can get up to $750. The amount of the tax credit gradually decreases as incomes rise.
Tax credit bill is SB350.
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