Local rehab centers would benefit from proposed new tax credit

      A proposed new tax credit would give a boost to community-based drug treatment programs throughout the state.  The plan’s sponsor says these programs do a lot of good and give back to their communities but some are facing financial challenges and she wants to see them get more support.

Representative Cheri Toalson Reisch (Photo: Tim Bommel, Missouri House Communications)

      Under House Bill 2527 a taxpayer who makes a donation to a faith-based organization, peer- or community-based organization, or recovery or community center or outreach that offers addiction recovery services could claim a tax credit for an amount equal to half of that donation.  Up to $2.5-million in tax credits could be awarded in one year, subject to the legislature appropriating the money for them.

      Sponsor Cheri Toalson Reisch (R-Hallsville) says she has such rehab organizations in her district and she’s seen how they benefit individuals and the overall community. 

      “I see what [program participants] do on a daily basis.  They get jobs.  They help their communities out.  We don’t want people to recidivate.  We want them to be able to pay their child support, to pay their bills, and support themselves, so it’s a win-win.”

      “I have Primrose Hill, which is part of Team Challenge, in my district.  It helps women with babies and children to get over addictions.  I also have In2Action that helps people with addiction and recovery and felons coming out of prison,” said Toalson Reisch.  “If you’d have heard the testimony [from program participants] from a year ago, I was bawling my eyes out.  This is that important to people.”

      Toalson Reisch said some of these programs are struggling, and others are looking to expand.  She said in either case, this legislation could give them the help they need and thereby help more Missourians.

      “Especially, I think, during COVID and a lot of stressful times in their lives [some Missourians] need this help and to know that a resource is there for them locally that they can utilize and be put into a program and help them overcome their addictions.”

Mission Gate Prison Ministry works with more than 300 men, women, and families each hear.  Program Director Stephen Hunt told the House Committee on Ways and Means this bill would encourage more contributions to his organization.

      “We support this bill because two-thirds of our annual budget is funded by private donations,” said Hunt.

Stan Archie, the Clinical Director of Footprints, Inc. in Kansas City said this bill would also give every Missourian the chance to be a part of someone’s recovery.

“It invites people who can’t get out on the street to be a prat of the solution, and at the same time it also encourages dollars to come into the places where we can demonstrate an effective program,” said Archie.

      David Stoecker, Executive Director of the Springfield Recovery Community Center, told lawmakers these recovery programs save the state money. 

      “It’s over a $20 return for every dollar spent on recovery support, so that $2.5-million equates to the state saving $50-million a year, which to me is a complete no-brainer,” said Stoecker.   

      Toalson Reisch filed this proposal last year but late in the session, so it only cleared one committee.  With it getting traction earlier this year she is optimistic it can become law.  The Ways and Means committee approved HB 2527, sending it on to another committee.

      She proposes that these tax credits be offered for six years, at which time they would expire unless renewed by the legislature.

House Committee advances foster care, adoption supports

      A House Committee has voted to make adopting or fostering children in Missouri easier, with its support for two bills that are early-session priorities for chamber leadership.

      The House Committee on Children and Families unanimously passed House Bill 429, which would authorize an income tax deduction for foster care expenses; and House Bill 430 which would expand the state’s existing $10,000 tax credit for the adoption of children with special needs to any adoption. 

Representative Hannah Kelly (photo: Ben Peters, Missouri House Communications)

      The bills’ sponsor, Representative Hannah Kelly (R-Mountain Grove), said both proposals have been stalled in past years but are priorities of House Speaker Rob Vescovo (R-Arnold)

      “Because of Speaker Vescovo’s leadership we are looking at sending this thing to the House floor, sending it to the Senate right away, and it’s just awesome,” said Kelly.  “Today doesn’t have anything to do with Hannah Kelly, it has to do with Speaker Vescovo’s leadership and people who have gone on before me and plowed the ground.”

The proposed tax deduction for foster care would begin January 1 and continue for six years unless extended by the legislature.  Parents who foster children for at least six months would be eligible for a deduction of up to $2,500, or $5,000 for a couple filing jointly. 

Those who foster for fewer than six months could apply for a prorated deduction.  Kelly said extending help to those foster parents is no less important.

“Sometimes children need a safe place for just a few weeks while mom and dad get a house cleaned, or while they take certain trainings, or perhaps they simply need a temporary place to stay while they find a permanent placement, and so this also allows to be supportive to the foster parents who provide that respite care, that temporary place,” said Kelly.

      Kelly said anything that makes it easier for a child in foster care to be adopted isn’t just good for that child, it makes financial sense for the state. 

In the case of her own daughter, who she adopted last year at the age of 18, “If she would have stayed in the system she would have stayed there until she was 21 … from a financial standpoint … the state would’ve spent $21,000 just as a base amount, before she aged out of the system.”

      Vescovo, who was adopted out of foster care, called on House members last week to join him in expanding the adoption tax credit.

Missouri House Speaker Rob Vescovo (photo: Ben Peters, Missouri House Communications)

       “Together we can make adoption a possibility for many families who may not have the money but have the love and support to give a wonderful life to a person in need.”

      He also asked for members’ support for foster care reforms, including a tax deduction, “which can encourage more Missouri families to open their doors and their hearts to our young people in need.”

      “We know we have more than 13,000 kids in the foster care system and more enter the system every year.  We must take every step possible to give each and every one of these kids an open door of opportunity so they can grow into healthy, productive adults,” said Vescovo.

      With the committee’s action today, those bills will go before another committee and could be heard by the full House next week.

House debates reinstating tax credits for shows, movies shot in Missouri

Missouri lawmakers are debating whether the amount of money that comes into the state when movies and TV shows are filmed here is enough to merit giving producers a tax break in return.

Representative Kathy Swan (photo: Tim Bommel, Missouri House Communications)

Cape Girardeau representative Kathy Swan (R) says it is.  She’s proposing in House Bill 923 that the tax credit for production of film projects in Missouri be reinstated.  It was eliminated in November, 2013.

Swan’s district is where the major motion picture Gone Girl, starring Ben Affleck, was filmed in 2013.  She says one need look no further than how that benefited her region to see these credits are worthwhile.

“With a $7.9-million boost to the regional economy of Cape Girardeau … the state redeemed $2.3-million in tax credits, generating a net of $4.7-million in economic activity in the State of Missouri,” Swan said.  “116 Missouri crew members were hired, 1,400 local extras, 7,000 hotel room nights paid for and secured, cars rented, set supplies, office supplies were all purchased from local businesses, and food was catered for workers.  In addition, university students had the opportunity to apprentice alongside professionals.”

Swan said since the film tax credits were allowed to expire the state has missed out on more than 10 projects that could’ve carried more than $150-million of economic impact.  That includes projects that are set in Missouri, such as the Netflix series Ozark, starring Jason Bateman.

That series, a dark drama about drug money laundering that has been renewed for a third season, is set around the Lake of the Ozarks, yet is mostly shot in Georgia.

That frustrates Lake Ozark Republican Rocky Miller.

“The Ozarks happen to be in Missouri … they are not in Georgia,” said Miller.  “The beautiful Lake of the Ozarks doesn’t have a whole lot of pine trees, nor a muddy bottom, nor a lack of fun stuff that goes on in the Ozarks, and I know for a fact that if it were not for the lack of this film credit we would have greater exposure for the actual, beautiful, bluff-laden Lake of the Ozarks rather than the pine tree surrounded lake from somewhere in Georgia.”

Miller said for a series like Ozark to have filmed at a site already so popular with tourists such as the Lake of the Ozarks would have brought tourism dollars to Missouri for years to come, exceeding the $150-million impact Swan referenced.

Not everyone is sold on the proposal.  St. Louis Republican Jim Murphy said to vote for this bill would be a “vote for shiny objects.”

Representative Jim Murphy (photo: Tim Bommel, Missouri House Communications)

“What we’re talking about here is spending $45-million over the next ten years, or $4.5-million next year for a shiny object – to bring in a [transient] film crew to film a film just to make us feel good,” said Murphy.  “Would that $4.5-million be better spent bringing a factory here that year after year will employ Missourians?  That’s what tax credits are for.  Not for shiny objects.”

Amendments to the bill would require applicants for the film tax credit to disclose any political contributions in excess of $25 made to a Missouri candidate or party; allow municipalities where a project is being filmed to offer a local one-percent tax credit that would trigger a greater tax credit from the state; and require a film receiving the credit to include a logo and statement in its credits indicating it was shot in Missouri.

Another favorable vote would send Swan’s proposal to the Senate.

House budget committee names first target in tax credit reform: wine & grape producers tax credit

The House Budget Committee has taken the first step in what could be a longer, broader process of tax credit reform.

Representative Justin Alferman (photo; Tim Bommel, Missouri House Communications)

The committee must annually clear state agencies to authorize tax credits.  When it met this year, it recommended that issuance of the wine & grape producers tax credit not be continued.

Vice-chairman Justin Alferman (R-Hermann) described the decision as a “test run,” because some believe that when the legislature chooses to end a tax credit, it will likely be sued by someone who wants to get the involved credits.

“What does happen?  We’re going to eliminate this.  If a year goes by and we say, ‘Look, we eliminated this one and everyone respected the legislature and their choice here,’ then maybe we can start going after some of these bigger ones like low-income housing, like historic tax credits; some of the ones that are causing the biggest strain on our budget,” said Alferman.

The wine & grape producers tax credit offers a break on income taxes equal to part of the purchase price for equipment used in making wine or growing grapes.  In each of the past two years between $14,000 and $17,000 worth of the credits have been issued, and more than $14,700 was waiting to be redeemed at the end of Fiscal Year 2016.  More than $575-million was redeemed across all tax credits in Fiscal Year 2016.

Alferman, whose district includes numerous wineries, said it is an important credit to eliminate.

“It is a great example of a tax credit that has worked but has long outlived its usefulness in our state,” said Alferman.  “I believe all tax credits should have a sunset … regardless of if it’s doing good things for our state or if they are simply pork barrel spending, which I believe a lot of them are nothing more than pork barrel spending.”

Alferman said the credit was created to help build the state’s wine industry, and that’s been done.  He said now there are people using the credit but creating subpar wines that hurt the industry as a whole, or using imported juice or grapes that would not grow here yet labeling the products as Missouri wines.

He hopes after this the legislature can proceed with more reform of tax credits, which he said have “run rampant.”

“Representative [Don] Rone did a great job of going through and analyzing along with our budget staff.  We have over $1.5-billion – with a ‘B’ – of tax credits that have been issued but have not been redeemed.  Well what would happen if those all got redeemed in one year?  We get just under $10-billion of general revenue taxes in the State of Missouri every year.  If those all, for whatever reason, got redeemed in one year, that’s 10-percent of all of our state revenue for GR.  That would devastate the state,” said Alferman.

Meanwhile, Governor Eric Greitens (R) created a committee to look at the state’s tax system, including tax credits, and recommend changes.  Alferman is hopeful the legislature will be able to work toward tax credit reform along with that committee.


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.