Capitol Report for April 9th, 2008

Tax Credits – Incentives or Give-A-Ways?
It is hard to believe that in just five weeks the General Assembly will meet its constitutional deadline to have the 2009 budget completed and one week after that we will adjourn the 2008 legislative session. As we enter the home stretch in crafting this years spending plan, we again find ourselves struggling with the enormous growth in tax credits. According to the most recent projections, Missouri’s state government could hand out over $700 million in tax credits in 2009, and if a couple of the proposals currently being discussed are passed, that number could exceed $800 million. This would be nearly a one hundred percent increase in the last five years.
Over the last three years, I have been very critical of how our state government has been spending the taxpayers’ money. I have fought to slow government spending and put money aside for the day when our economy is not as robust or prosperous. Although we have seen strong revenue growth over the last few years, mandatory spending and the expansion of tax credits have negated nearly all of that growth. My greatest concern in regards to tax credits rest in the fact that because of how they have been structured, there is little if any legislative oversight and instead many of these credits are thought of as entitlements. The most frustrating part is that before a single dollar is appropriated to educate our children, protect our most vulnerable, or repair our roads, Missouri’s tax credit recipients get their money first. As a result, one could argue that special interest tax credits have become the General Assembly’s number one spending priority.
I believe that allowing special interest to carve out special treatment in our tax code is wrong. Missouri’s working families should not be stuck paying the bills for big corporations or large campaign contributors. I believe it is time to reform our tax code. We need tax policy that encourages growth and allows Missouri’s hard working families to keep as much of their own money as possible. This also means that our state government cannot continue to issue extensive tax credit programs that threaten our financial future by allowing a special few to benefit while the rest of us pay the price.
As the General Assembly nears the end of session, I will continue to fight for a legislative process that honestly evaluates the use and performance of Missouri’s tax credits. This is why I have continued to promote legislation that ensures reasonable and responsible growth of tax credits. If a tax credit has lost its value, then we need to eliminate it. If a tax credit is meeting its intended goal in helping foster our state’s prosperity, then we need to ensure that it is being delivered with accountability. It is unacceptable for us to have a system that benefits a privileged few at the cost of the whole, and as long as I am elected, I am committed to fighting against this injustice.
As always, please feel free to call, email, or write with your ideas or concerns. The Capitol number is (573) 751-1415, my email is brad.lager@senate.mo.gov and my mailing address is Room 429, State Capitol Building, Jefferson City, MO 65101.