Missouri is offering $343,000 in tax credits in hopes of enticing private donors to help finance a new livestock arena at the Missouri State Fair that the government can't afford to build on its own.
The Missouri Development Finance Board approved the tax credits Tuesday, marking just the second time in the 25-year history of its tax credit program that credits will go to a state project.
It's also just the second tax credit project the agency approved this year.
Missouri's expansive system of tax credits has come under scrutiny as tax revenue has declined and the state has been forced to lay off employees and cut aid to public schools and colleges. The state has foregone $1.1 billion in taxes in the past two years because of credits given for development projects or social causes. The loss amounts to more than 7 percent of state revenues.
The Legislature passed a law last year limiting tax credits approved by the finance board to $10 million per year, and Gov. Jay Nixon built on that by slowing down the issuing of tax credits this year.
The governor appoints most of the members of the tax credit board, which has the authority to award
credits equal to 50 percent of the private contributions given for projects.
In the case of the State Fair, the board will issue up to $343,000 in tax credits in exchange for $686,000 in donations to the project.
The new arena will cost an estimated $726,000 and be connected to the existing livestock coliseum, which was built more than 100 years ago. The new facility is intended primarily to provide a place with a roof - it will not be enclosed with walls - for contest participants to prepare their horses and cattle without getting them wet and muddy.
State Fair Director Mark Wolfe said the fairgrounds in Sedalia lost some equine events it used to host when the fair was not in session because it lacks a covered practice arena.
"The state has not funded much in the way of capital improvements in the past few years because of the budget situation, which is understandable," Wolfe said.
Fair officials hope the tax credits will help the nonprofit fundraising organization that supports the fair generate contributions from agricultural industry groups. The goal is to complete the fundraising in three years and build the new arena in 2013 or 2014, Wolfe said.
The only other state project to be financed through the tax credit program was the Department of Conservation's Discovery Center in Kansas City, which received $800,000 in tax credits in March 1999.
The board waived its normal two-presentation requirement for applicants in order to approve the State Fair project under its 2010 allotment of tax credits, which went largely unused.
The only other project the board approved this year was the relocation of a history museum in Springfield.
"Contributions, and interest in them, has been way down," said the board's executive director, Robert Miserez. "We're attributing a lot of that to the economy. It's hard to raise money - even for tax credits."