A matter that has recently garnered much attention at the Capitol is tax credit reform and making sure that Missouri receives the most positive return on investment possible. Conducting wise financial decisions is something for which we should always strive, especially in a potholed economy. However, it’s now more important than ever to scrutinize how every dollar is spent. We need to find the delicate balance between offering enticing incentives for businesses to move to Missouri, while ensuring our state doesn’t receive a large financial hit. We also need to be sure that tax credits aren’t offered at the expense of critical state services, such as education programs. Last week, the Senate gave its approval to SB 120, which addresses tax credit reform.

Senate Bill 120 is designed to rein in futile tax credits and, over the course of 15 years, save Missourians an estimated $1.3 billion. One of the primary aspects of tax credit reform that the bill addresses is scaling back our two largest tax credits — Historic Preservation and Low-Income Housing tax credits. Of the nearly $650 million that was redeemed last year in tax credit programs, nearly half of that total came from those two programs. Currently, Historic Preservation credits and Low-Income Housing credits are annually capped at $140 million and $190 million, respectively. Senate Bill 120 would cap Historic Preservation credits at $45 million, and Low-Income Housing credits at $50 million, both annually.

The bill would also create the Missouri Export Incentive Act, which would help attract cargo flights to our state that would normally land and depart in Chicago. The act would offer up to $60 million in tax incentives over eight years for air cargo exports. In addition, the bill would create the Missouri Angel Investment Act, which would offer incentives to investors that advance the startup of up-and-coming companies specializing in technology. This act is beneficial because, not only are we creating a climate to encourage business growth in our state, we are supporting the ever-thriving field of 21st century technology. These state-of-the-art industries help lead us into the future and often bring with them giant revenues. If businesses like these call Missouri home, it would help our economy continue to flourish.

Missouri is a state that lives within its means and prides itself on its fiscally conservative principles; we need to carry those values over to our tax credit system. At a time when no state department is exempt from budget cuts, it’s only fair to get a better grasp of our state’s tax credits. Tax credits are designed to help our economy, not hinder it, so I’m glad action in the upper chamber was taken regarding this important matter.

Now in the House, SB 120 still has a lengthy journey to the legislative finish line. Most likely, the bill will be transformed in the other chamber, and a compromise will need to take place. To follow the progress of the bill, visit the Missouri Senate website at www.senate.mo.gov. You can also listen to my audio interview regarding SB 120 by visiting my Multimedia page on my Missouri Senate website (www.senate.mo.gov/rupp). Thank you for your interest in state government and may God bless you always.