EXPERT AVAILABLE: Missouri Legislature Special Session Should Not Cut Tax Credits, MU Expert Says

MU tax expert says potential cuts to the Missouri Property Tax Credit would hurt low-income citizens

September 6th, 2011

The views and opinions expressed in this “for expert comment” release are based on research and/or opinions of the researcher(s) and/or faculty member(s) and do not reflect the University’s official stance.

COLUMBIA, Mo. – The Missouri state legislature begins a special session this week to address many important state issues. One item on their agenda is a measure that would revise the Missouri Property Tax Credit (MO-PTC), which would eliminate the tax credit for many low-income senior and disabled citizens. Brenda Procter, a University of Missouri Extension specialist in the College of Human Environmental Sciences and public benefits tax policy expert, believes this change would present serious challenges for those who are most affected by a poor economy at a time when they can least afford it.

“Many low-income renters have been getting the MO-PTC for years and have relied on it to meet their basic needs,” Procter said. “They have depended on this money every year to help pay bills during the post-holiday, winter heating season. For many renters, the tax rebate is the only time all year that they receive a lump sum of money. If this measure passes, they would have to come up with that money somewhere else.” 

The Missouri Property Tax Credit (MO-PTC), also known as Circuit Breaker, is a tax credit for certain senior citizens and disabled individuals to offset a portion of the real estate taxes or rent they have paid for the year.  Currently, eligible citizens are entitled to a property tax credit of up to $750 for renters and $1,100 for homeowners who occupy their homes. During this year’s special session, the Missouri Legislature may totally eliminate that credit for renters to help finance a major economic development plan. While eligible homeowners would still be able to receive the credit, Procter says cutting eligible renters out of the tax credit will hurt many economically vulnerable people.  

“In many ways, this potential change seems almost mean-spirited because property taxes are reflected in their rent, even though only homeowners would remain eligible under the deal,” Procter said. “Ultimately this change would be very unfair to those low-income people who depend on credits like this. Where would they be able to turn?”   

Elimination of the MO-PTC is part of a larger package meant free up money to subsidize data centers, science startups and a Chinese cargo hub at St. Louis’ Lambert International Airport. Procter is not challenging these new programs; however she urges the Missouri legislature to reconsider how they find the funding.  

“I won’t take issue with these economic programs that the legislature wants to support,” said Procter. “However, our most vulnerable people, low-income elderly and disabled renters, should not have to pay for them.”