House advances budget plan using money from repealed renters tax credit

The state House is poised to propose a Fiscal Year 2018 budget that includes money based on the repeal of a tax break for low-income seniors and the disabled.  Budget planners used the money that would be saved by that repeal to support in-home care for the elderly and disabled.

The repeal was first proposed a few years ago by former Governor Jay Nixon (D), based on the recommendations of a bipartisan commission that recommended changes to Missouri’s tax structure.  The legislature passed a bill based on language Nixon had prepared, but Nixon later vetoed the bill after groups spoke out against the proposal.

The plan was brought up again this year as part of Republican budget makers’ response to diminished revenue and the need to reduce spending.

Kirkwood Democrat Deb Lavender proposed pulling money from three locations in the state budget to restore money for that tax break. Lavender said Missouri is in a budget crisis because the legislature has granted tax cuts to corporations.

“I cannot understand that the first tax cut we want to remove is one that benefits our seniors and people with disabilities living in poverty,” said Lavender.

Lavender said her proposals would buy time for the seniors benefitting from that tax break, so the state could spend the next year developing a more comprehensive tax credit reform plan.

“We were told three weeks ago there was a bipartisan tax commission from 2010 that had recommended this tax credit for our poverty seniors be removed,” Lavender told fellow lawmakers.  “We were not told that all members did not vote for those amendments and that there were 27 other tax credits that were recommended to be removed or altered.  Why is this the one that we went after?”

Republicans credited Lavender with working hard to find money to support that credit, but said she didn’t find enough.

“It does not equal the same amount that was reappropriated under House Committee Bill 3,” said Representative Justin Alferman (R-Hermann), referring to the legislation that repealed part of the renter’s tax credit.  He said the difference would mean there would not be enough money to maintain the in-home care program at its current level.

Lavender’s amendments were rejected.

The House is expected to vote Thursday to send that budget proposal to the Senate for its consideration.

The House Bill that would repeal that portion of the renters tax credit is still in the Senate.  If it does not become law, the money that supports that credit would not be available for the in-home care program.