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State budget options include cutting tax credit for seniors

After thousands of Missourians lost in-home health care and nursing home assistance, some lawmakers were presented with options of how to reverse the health care cuts last week, all of which were related to using savings from adjusting a tax credit for senior homeowners and renters.

Missouri House Speaker Todd Richardson and Senate President Pro Tem Ron Richard announced Sept. 13 that within three weeks, House Budget Chair Scott Fitzpatrick, R-Shell Knob, and Sen. Mike Cunningham, R-Rogersville, would develop solutions to return the level of care to what it was last year. After the governor vetoed a bill that would have restored about $35 million to the budget, about 8,300 seniors, disable and low-income Missouri lost access to in-home health care.

“Finding a viable solution to preserve these critical services for disabled Missourians has been, and continues to be, a top priority for the Missouri House and for the General Assembly,” Richardson said in a statement. “I’m confident that Rep. Fitzpatrick can work with Sen. Cunningham and with Republicans and Democrats in both chambers to find a fiscally responsible solution.”

Fitzpatrick said the the trick would be to find a plan that could not only pass through the House and the Senate but also could get the governor’s approval. To pass a bill that would reverse the cuts, legislators would either have to vote themselves into a special session by a three-fourths vote or the governor would need to call the General Assembly’s third session of the year.

Though there has been little public movement on the negotiations, Fitzpatrick and Cunningham presented seven options to a bipartisan group of lawmakers Thursday over a conference call for feedback. Picking up on a discussion from the end of the regular legislative session, the options would not fully repeal the “circuit breaker” tax credit but would put limitations on it. The tax credit is thought to help seniors make their mortgage or rent payments so that they can live independently and not in a more expensive nursing home.

“Any plan we will have has to start with the circuit-breaker, even if its just reform and not total repeal,” Fitzpatrick said. 

Some of the variations would have been taken up together to be able to save $35 million, according to Rep. Crystal Quade, D-Springfield.

According to Quade, the variations include:

• Reduce the cap amount of the tax credit for homeowners from $1,100.

• Reduce the cap amount of the tax credit for renters from $750. 

• Reduce the percentage of total rent or mortgage payments renters could claim from 20 percent.

• Reduce the income limit for eligible seniors to 133 percent below the federal poverty level regardless of marital status.

• Raise the age of eligibility for the tax credit from 65 to 70.

• Eliminate eligibility for any senior who lives in a residence that receives federal or state subsidies.

• Eliminate eligibility for any senior who receives federal or state financial aid for housing.

Quade said she couldn’t give her opinion on any of the options until she was provided with the number of people who would be affected by the cuts to the circuit breaker tax credit and how much each option would save the state. She said several of the options would most likely needed to passed together to save the $35 million needed.

Repealing the tax credit for just senior renters was a solution Fitzpatrick championed at the beginning of the legislative session. Though the proposal passed through the House, the Senate refused to pass the proposal and amended the bill so that savings would be taken from dedicated unspent funds for agencies around the state. 

After days of negotiation with the Senate went nowhere, Fitzpatrick presented the Senate plan to the House on the last day of session. Though Fitzpatrick voted against the bill, the House passed it. 

Weeks later, Gov. Eric Greitens vetoed the bill, saying it was a fake, one-time fix. During the September veto session, a veto override attempt led by House Democrats was unsuccessful. 

Fitzpatrick said he started with the circuit breaker tax credit because he knew that repealing it for renters had passed through the House once before and any variation could do so again.

“There’s only so much I can work with here,” Fitzpatrick said of ushering a bill through the Legislature.

Quade disagreed, saying that bringing up the circuit breaker was presenting a “false choice” to lawmakers once again.

“There are a lot of tax credits,” Quade said. “There are a lot of other places we could start.”

Quade said Democrats presented options that could restore about $73.5 million to the budget, which could be used to shore up funds cut from in-home health care, nursing home care and prescription assistance. 

Suggestions included eliminating a 2 percent discount for those who file their withholding, sales and use tax in a timely manner; repealing a 2015 bill that allowed corporations to not claim out-of-state sales for taxes; and repealing parts of a 2014 bill that lowered the top individual brackets and gave business income deductions on taxes. One suggestion also included adjusting the circuit breaker tax credit to make eligibility match Medicaid asset limits.

Quade said she hoped for a more public dialogue that would seek input from stakeholders and the public.

“This process hasn’t been very transparent,” Quade said.

Fitzpatrick countered that having a small group of lawmakers working on a bill wasn’t out of the ordinary. If a bill is filed, it would still need to go through the complete legislative process, with committee hearings and discussions in both chambers, before becoming law.

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