TAX NEWS - June 2010

Kinder accuses Nixon of stonewalling on housing tax credits

JEFFERSON CITY — The political acrimony between Gov. Jay Nixon and Lt. Gov. Peter Kinder grew more contentious today as Kinder, a Republican, used a Missouri Housing Development Commission meeting to criticize the Democratic governor's handling of state tax credits.

Kinder, who sits on the commission, accused Nixon of having a strategy of delaying the approval of tax credits — which are often used to offset development costs and encourage investment — until "developers are brought to their knees."

At the housing commission meeting, Kinder tried to force a vote on a St. Louis project of developer Paul McKee, who has been a major Kinder campaign contributor. The project, a redevelopment of the "Clemens House" is part of McKee's massive northside redevelopment plan.

There appeared to be little support on the commission for Kinder's project, and he eventually withdrew the motion, but not until Nixon's representative on the board, Rex Burlison, exchanged harsh words with the lieutenant governor.

Burlison accused Kinder of "shilling" for McKee. Kinder called the comments "out of line".

The dispute over tax credits grew out of a debate during the legislative session to rein in some of the fastest growing programs, including the low-income housing tax credits. Nixon had pushed for changes to all of the state tax credit programs, and a cap on the low-income housing credits and historic preservation tax credits that are a popular part of urban redevelopment in Kansas City and St. Louis.

The legislative effort failed, and Nixon drew the ire of developers when he canceled a May meeting of the housing commission, when several projects were awaiting approval on millions of dollars worth of tax credits.

At the time, Nixon said the "slow down" was intentional because of the state's budget crisis. Developers and other business interests in St. Louis have said the slow down will cost the city construction jobs.

Kinder tried to convince the commission's chairman, Jeffrey Bay — a Nixon appointee — to schedule a new meeting to consider the Clemens House and other similar projects. Bay would not commit, but said he'd work with Kinder on scheduling a meeting.

Treasurer Clint Zweifel, a Democrat, briefly tried to play mediator by adjusting Kinder's proposal to include several similar projects — not just McKee's — but Bay and Burlison both indicated they didn't want to rush into anything, in part because the commission is without an executive director.

Bay said the commission is interviewing executive director candidates July 1.