Outgoing state Sen. Matt Bartle scored a victory this week but says the real battle lies ahead over whether to limit state tax credits that are taking a bigger share of the state’s shrinking budget.

Outgoing state Sen. Matt Bartle scored a victory this week but says the real battle lies ahead over whether to limit state tax credits that are taking a bigger share of the state’s shrinking budget.


“K-12 is going to have to take a massive cut unless the legislature says no to these tax credits,” Bartle said, referring to schools.


Due to term limits, Bartle, a Republican from Lee’s Summit, is leaving office after four years in the Missouri House and eight in the Senate. He has long been raising concerns about tax credits – “So I was a little bit of a voice in the wilderness a few years ago,” he says – and this year Gov. Jay Nixon named him to a Tax Credit Review Commission after Nixon’s own attempts to get the General Assembly to enact limits failed.


The state has more than five dozen tax credits, the two biggest of which are for historic preservation and low-income housing. They also are seen as a way to encourage economic development.


The state auditor puts the dozens of tax credits at $584 million in fiscal year 2009, though Bartle uses the figure of $800 million.


“No other state in the union spends that kind of money in historics,” says state Sen. Victor Callahan, D-Independence.


Those two figures are roughly the range of the deficit the state faces for fiscal year 2012. That’s the budget lawmakers take up in the spring. The trend is what Bartle, Nixon and others find worrisome: The auditor says general revenues grew only 15.7 percent – with up years and down years – from 2001 to 2009, while tax credit redemptions grew 57 percent.


Critics press the point even further: As far as the budget is concerned, a tax credit is another line-item of spending and has to be accounted for. Even if developers don’t put in for every dollar available – they typically don’t – the state has to budget as if they will. The problem compounds when state revenues fall, as they have sharply since the recession hit. If the open-ended tax credits don’t change, they take up a larger and larger chunk of the budget, meaning everything else is hit even harder when cuts come.


The General Assembly’s failure to address the issue, Bartle says, is already costing taxpayers in Eastern Jackson County. As state funding has slipped, many area school districts have raised their levies to make up for that.


At the very least, Bartle and others say, at budget time those getting the credits should get in line with advocates for schools, roads, corrections and every other state service and have to make their case.


The commission this week recommended that the state cap the credits, saving in excess of $200 million a year. Bartle is happy to see that, but he sees a tough fight in the General Assembly.


“It’s going to be a very, very difficult question,” he said.


The historic and housing tax credits, in particular, Bartle says, are going to developers who are well-connected political donors.


“Does the legislature take care of these developers, or does it take care of K through 12?” he said.


New legislators, including majority Republicans, will have to decide either to short local schools or stand up to the leadership of their own party.


“You’ve got a wave of freshmen in the House,” he said. “What I worry is they won’t be thinking for themselves but will do what their leadership wants.”