Earlier this year, Gov. Jay Nixon tried to get state legislators to rein in Missouri's historic tax credit program. They wouldn't.

Now, some worry that he is trying to do so on his own.

Local developers and others who work with the program — which provides incentives to rehab historic buildings and has become hugely popular in parts of St. Louis — say that the state has recently begun taking a much tougher line on applications, launching new rounds of review and slowing down awards under the $140 million-a-year program.

It could be an effort by state officials to plug Missouri's yawning budget shortfall and take a sharper pen to state spending. But builders who have come to rely on historic tax credits to fund their projects say that the ad hoc, unspecified changes threaten to bring redevelopment in St. Louis to a grinding halt.

"The administration has really slowed the process down," said Jefferson Mansell, executive director of the Landmarks Association of St. Louis. "It's creating a very unhealthy environment out there."

A dozen local bankers, developers and others who work with historic tax credits told the Post-Dispatch that they fear the impact of the changes, but few would speak publicly for fear of alienating the powerful state Department of Economic Development. And specifics are sketchy, but a letter the agency sent to at least one local consultant mentions a new "expanded review process" to make sure all historic tax credit applications are done strictly by the book.

Many in the local development community fear the expanded review could drag out the process by months. That, in turn, could drive up the cost, and drive down the use, of the popular incentive.

Killing historic tax credits is certainly not the intent, said John Fougere, a spokesman for the Department of Economic Development. The new review is part of changes to the program that took effect Jan. 1, when a new cap took effect and made it more important that applications be processed in proper order. It does take longer, he said, but it is the law.

"There's this orderly process now," he said. "It's just slightly different than before when there was no cap."

This may just sound like a spat over bureaucracy. But for St. Louis, and for Missouri taxpayers, the stakes are high.

The credits — which cover one-fourth of the cost of a rehab project — have poured into the city over the last decade. They have played a big role in the redevelopment of everything from downtown office buildings to Washington Avenue lofts to four-families in red-brick neighborhoods such as Benton Park and Shaw. Without them, supporters say, many of those buildings would still sit dark.

But as their use has grown, so has the cost.

In 2000, Missouri taxpayers redeemed $33.9 million worth of the credits, according to a report from state Auditor Susan Montee. Last year, that number was $186.4 million, or one of every $40 collected in the state's general budget.

That tab is just too high, say the program's critics, and they have launched annual attempts to pare it back. Last year, legislators agreed to a $140 million-a-year cap for big projects, which took effect Jan. 1.

Then, in March, facing a huge budget deficit, Nixon unveiled a proposal to revamp all of Missouri's tax credit programs, saying that too many of them generate too few jobs for the money spent. His biggest cuts would have targeted the biggest programs — the historic and low-income housing tax credits — which pay for real estate development but don't directly create permanent jobs. A new approach is needed, he said, to get more bang for the buck. The proposal died in the Legislature but is widely expected to come up again in some form next year.

Now, many of those programs are under the microscope.

Nixon's administration has said it will cut $47 million from the budget this year through "more careful review" and lower demand for tax credits. And the low-income housing credits program has been stalled for two months after the state board that awards them canceled its May meeting and issued none in June.

When it comes to the historic incentives, even the suggestion of cuts seems to be having the desired effect. In the first six months of the year, according to the Department of Economic Development, only $13.4 million in historic credits were authorized — the first step in the program's two-step award process. That's down from $87.7 million during the same period last year, and $86.1 million from July through December.

Applications fell, too. Just 60 were filed through June 30, said Fougere, compared with 154 the year before. Of those, half are still awaiting approval.

The economy, along with tight credit for commercial real estate, is likely one factor. But so, experts say, is the uncertainty around the program's future.

Its complex award process — credits are "authorized" before a project starts but are awarded only when it's complete, often a year or two later — means developers typically must borrow against credits they don't yet have in pocket. Questions about when, or even if, they will get repaid can make banks and investors skittish, and drive up costs.

Any new, vague or unexplained review process will only heighten that concern, said Bryan Keller, who heads real estate services at accounting firm RubinBrown in Clayton.

"It's going to put some stress on the system," he said. "Buyers have an expectation of when they're going to get the credits. Adding another six to 12 months could impact pricing."

Some worry it also could drive investors — the tax credit buyers whose cash ultimately fuels projects — out of Missouri. If they are concerned that the state's credit programs are shrinking, they will put their money someplace else.

"There's simply too much competition and too few dollars," said state Rep. John Diehl, R-Town and Country, a staunch historic tax credits advocate and, in his day job, a land use attorney. "Investors just aren't going to invest in places where the rules and the process aren't clear."