JEFFERSON CITY • A tax credit program designed to help developers restore and reuse old buildings and put them back on the property tax rolls would be pared back under a plan approved Thursday in the Missouri Senate.
The measure sponsored by Sen. Dan Hegeman, R-Cosby, would reduce the cap on credits to $90 million, down from its current level of $140 million annually.
But it would allow the state to allocate an additional $30 million to the program if the cap is met and the projects are tailored for high-poverty areas.
The package advanced to the House on a 24-8 vote, with most St. Louis-area Democrats voting “no.”
In addition to reducing the cap, the measure would alter the process by which tax credits are awarded and give more control over who receives them to the Department of Economic Development, which is controlled by the governor’s office.
Sen. Maria Chappelle-Nadal, D-University City, expressed support for the legislation because it attempts to funnel the credits toward areas of the state that need it most.
“They were intended for truly blighted, poverty areas,” said Sen. John Rizzo, D-Kansas City.
Hegeman said reducing the amount of credits available will free up money for other state programs during tight budget times.
“This is an opportunity and a time to judge this program against the other needs of our state, such as our senior citizens,” Hegeman said.
Defenders of keeping funding at current levels said the program has helped transform neighborhoods at a reasonable cost and created needed construction jobs.
Supporters say historic tax credits are valuable because they require $4 in private funding before any $1 worth of credit is awarded. In addition to eventually generating additional sales taxes for local governments, the projects result in jobs and taxes from construction materials.
Among those voting against the cuts was Democratic Sen. Jamilah Nasheed, who earlier pointed to Washington Avenue in downtown St. Louis as an example of the good things that the tax credits have done for her home city by providing incentives for developers to renovate shuttered industrial lofts into retail and residential spaces.
Missouri has had the largest such program in the nation for years.
From 2002 to 2016, some 900 projects took advantage of state and federal credits, and about $3.15 billion spent on historic rehabs in St. Louis qualified for some reimbursement from credits, according to the National Trust for Historic Preservation.
During President Donald Trump’s visit to St. Charles in November, he touted the renovation of the Old Post Office by developer Randy Schilling, who used historic tax credits to convert the facility into a home for startup companies.
But Republican Gov. Eric Greitens last year said the use of tax credits is often burdensome, complex and unfair. He already has engineered an end to state funding for tax credits for low-income housing projects by replacing members of the board that allocates money for the projects.
Former Gov. Jay Nixon, a Democrat, also bemoaned tax credits as funneling money away from other state expenses.
The legislation is Senate Bill 590.