KCTV5 investigates a plan to eliminate a tax credit - KCTV5 News

KCTV5 investigates a plan to eliminate a tax credit for vulnerable Missourians

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Independence resident Sue Porter is just one of nearly 105,000 Missourians who receive money through the state's so-called "circuit breaker tax credit" for renters. Created 40 years ago by Missouri lawmakers, the credit is meant to help low-income senior citizens and the disabled pay for affordable and safe housing.

Porter is a widow battling a disability while living on a fixed income.

"I have some medical issues," Porter said. "It's tough, but I'm trying to work through them."

As you can imagine, Porter was thrilled to learn about the special credit from her tax preparer. To qualify, a single person cannot make more than $27,500 a year; $29,500 for someone who is married.

"It's over a thousand, which is a lot of money," Porter said. "I don't know about for you, but a thousand dollars is a lot of money."

Steve Lyddon, who owns seven Jackson Hewitt Tax Service offices across the metro explained that, while the maximum yearly payout from this property tax credit is $750, residents can apply for multiple years at once.

"We can go back two, three years and get that credit for them," Lyddon said.

That is how Porter ended up with her $1,000 credit. She filed for rent payments made in 2011 and 2012. She plans to use the money to visit her eye doctor and the dentist.

"I don't ask for a lot," Porter said. "(It's) things that some people take for granted."

But this may be the last time Porter will be able to collect the credit. Senate Bill 350, quickly making its way through the legislature in Jefferson City, would eliminate the approximately $56 million in tax credits being given to people like Porter.

"That's not right," Porter said. "But I bet our politicians will take every little tax credit they can get."

Sen. Tom Dempsey, a Republican from St. Charles, MO, is the sponsor of SB350. He says the tax credit is being abused by some people who spend it on things he considers frivolous.

"I certainly believe that there are people that are taking this check, if you will, and spending it on worthy uses, for medicine. But I heard on the floor (it's also been used) for a microwave oven or someone who had used that as their Christmas fund for their children," Dempsey said. "It's not a Christmas fund for children; it's not a microwave oven tax credit."

Dempsey pointed out that the idea of repealing the tax credit was first raised by Democrat Gov. Jay Nixon during his State of the State Address on Jan. 28.

KCTV5 investigative reporter Stacey Cameron visited Nixon's office to ask about that. Press Secretary Scott Holste made it sound like his boss might be backing off that statement, saying the office will only agree to eliminate the renter's tax credit if it's part of a larger tax reform bill.

"We're certainly very aware of how this bill (SB350) is progressing through the general assembly. We're going to stay on top of it to make sure we can provide leveled service to seniors and to the poor that have been benefiting from this portion of the tax credit," Holste said.

"So he (Governor Nixon) will veto it, the renter's tax credit?" Cameron asked.

"I don't want to speak in certain until a final bill would be presented to the governor," Holste replied. "But the governor has made it very clear that what he is expecting and what he needs to see on his desk is a bill that promises broad-based comprehensive tax reform and making sure that we are able to put funding in programs for seniors."

While lawmakers have said an end to renter's tax credit will cut spending by more than $50 million, there are actually no plans to save that money. Instead, SB350 redirects it all into additional funding for social welfare programs like senior services and mental healthcare.

"We'll be putting that funding into programs like Meals on Wheels and other areas," Dempsey said.

Some lawmakers like Dempsey, believe redirecting the money into established programs and services will better serve seniors and disabled folks in need.

Porter finds that position insulting, saying politicians don't tell corporations and the rich how to spend money they receive from tax breaks.

"I would love for them to have to explain to me, 'OK, you get a tax refund. What do you spend it on? Let me decide' Cause that's what you're wanting to do to us and that's not fair," she said.

Fair or not, the Senate passed SB350 in late April. And when the budget passed through the house, it went through without the $56 million needed to cover the tax credit. But before the change becomes law, Porter has some advice for lawmakers in Jefferson City. 

"Any politician is welcome to come and live on what I live and live on a budget, then go back and maybe think 'you know what? I don't know my needs from my wants,'" she said.

As it stands, Missourians still can apply for the renter's tax credit for 2010, 2011 and 2012. But the clock is ticking. If SB350 becomes law, those applications must in by Aug. 1.

Kansas has a similar renter's tax credit. There are no plans to remove this in the Sunflower State. A qualified tax prepared will know who qualifies for the payments.

Update: The bill passed both the House and Senate, but vetoed the measure in mid-May. Lawmakers can attempt to override the veto in September.


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