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House Committee Approves Governor's Tax-Cut Bill

February 10, 1998
By: Lucas Wall
State Capital Bureau

JEFFERSON CITY - A $120 million property tax cut endorsed by Gov. Mel Carnahan emerged from the House Ways & Means Committee Tuesday.

The committee's substitute, which passed 22-2, combines elements of three tax-cut bills. It contains two items: 1) a "homestead" tax credit for all home property-tax payers, and 2) an expansion of the "circuit breaker" tax credit for senior citizens and the disabled.

Under the first provision, a state income tax credit of $35 per person could be taken by all Missourians who pay property taxes on a home and whose income, individual or combined, does not exceed $100,000 per year. Those who rent property may take the credit as well.

The homestead credit would take effect this year and expire Dec. 31, 2000.

The second provision would expand the maximum income level allowed to take the circuit-breaker credit from $15,000 to $25,000 a year. The state income tax credit, worth up to $750, offsets local property taxes paid by low-income senior citizens and disabled people.

Missouri must cut taxes this session to comply with the state constitution's revenue limit (the "Hancock Amendment").

Republicans, seeing the substitute as the session's major opportunity for tax cuts, tried amending it to increase the amount.

Rep. Michael Gibbons, R-Kirkwood, wanted replace the homestead credit with a credit for 15 percent of property taxes paid. He estimated the cost would be $195 million.

"This is the way to do an effective property tax cut," he said.

Rep. Todd Akin, R-St. Louis County, agreed.

"This gives a more honest break," he said. "This would be a nice package."

But Rep. Tim Van Zandt, D-Kansas City, said the amendment was not fair to renters, who don't pay property taxes directly.

"You've totally excluded them from any type of benefit," Van Zandt said.

Rep. Don Lograsso, R-Blue Springs, tried a simpler approach: doubling the homestead credit to $70 per person. Both amendments failed 13-11.

Republicans also supported another bill, sponsored by Rep. Kelly Parker, D-Salem, which would give a 3.3 percent across-the-board property tax cut. It failed on a 12-12 vote.

Rep. Vicky Wilson, D-Columbia, voted only for the committee's substitute.

"This is a comprehensive approach to helping people with shelter, while at the same time being responsible," Wilson said.

Wilson voted against the amendments because she said there are still many unmet needs in the state.

Some Republicans wondered whether the committee would consider more tax-cut bills this session.

After the meeting, Chairman Joan Bray, D-St. Louis County, said other such bills will be considered.

"There will definitely be other tax bills," she said.