State audit reveals historic preservation tax needs restructuring

A state tax credit program is costing taxpayers millions, according to state auditor Tom Schweich.

The historic preservation tax credit gives breaks to developers who renovate old homes and commercial
buildings around the state.

An audit released Tuesday claims there are times when only 49 cents per tax credit dollar goes to
funding the reconstruction of these buildings.

Schweich said maintaining local buildings like Shep’s Southside Diner in Jefferson City, which uses the
tax credit dollars, is important to protecting the history of Missouri.

Schweich just wants to see the program run more efficiently.

The way the program is structured, only 49 to 85 cents on the dollar of every tax credit actually goes towardconstruction cost.

The audit points out several ways the program can become more efficient and increase in value.

“We recommend the credit could be made refundable, meaning you could get the money even if you didn’t have the tax liability tomake it more valuable,” said Schweich.

He also said he doesn’t feel the Missouri Department of Economic Development is running the program well.

“Sometimes there’s delays in awarding the tax credits and we think the potential for abuse exists without a more active management of the program by the Department of Economic Development.”

Schweich said economic development doesn’t do onsite visits to see if the work being claimed by developers is actually being done.

He also said DED claims the tax credit created 30 jobs on one project, but the auditor said it was only 17 jobs.

ABC 17 News contacted the DED and was directed to the Governor’s Office, where a spokesman said the Governor hopes this is a wake-up call to reform the programs and generate stronger returns for taxpayers.

In 2013, the historic preservation tax credit had nearly $80 million in redemptions, making it the state’s 3rd largest tax credit program.