Missouri House Eliminates Renters Credit for Elderly and Disabled

This week, the Missouri House passed legislation (HCB 3) that would repeal a tax credit renters can claim if they are seniors or disabled. The credit on property tax, popularly known as the “circuit breaker,” has been in place since 1972, when it was passed by Missouri voters.  It has always included both property owners and renters, with renters allowed to claim a credit for a portion of their rent, up to $750.

Proponents of HCB 3 said renters don’t pay property tax, so they should not get the credit; opponents said landlords pass on a portion of their property tax in the rent they charge, so it is appropriate to allow renters to claim the credit. On average, the credit provides about $550 to low-income renters.

The House Budget Chairman, State Representative Scott Fitzpatrick (R-Shell Knob), said eliminating the renters credit would save the state of Missouri over $50 million. He proposed that those savings be placed in a new Senior Services Protection Fund that is established in HCB 3. The money in the fund could then be used to fund in-home and long-term care for the elderly and disabled.

Opponents, such as State Representative Deb Lavender (D-Kirkwood), who also serves on the budget committee, argued the $50 million in savings could be found in other areas of the state budget. In essence, Lavender said, you are asking the poorest of the poor to plug the hole in the state budget.

During the debate on the House floor, it was also pointed out that Missouri could pick up revenue savings by repealing part of a recent cut in corporate income taxes. Several amendments were offered to obtain the $50 million from sources other than the renters credit, but they were either ruled out of order or defeated. (See pages 1043-1048 and pages 1051-1056 of the House Journal for more information.)

The Missouri Catholic Conference (MCC) supports reforms in the credit, but opposes HCB 3 because it completely eliminates the renters credit and places too much financial hardship on some of Missouri’s poorest citizens. The Missouri Senate is expected to take up the bill after Spring Break.