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Governor leads effort to halt Missouri’s low-income housing tax breaks

Beyond Housing's Chris Krehmeyer stands in a vacant unit inside Rosie Shields Manor in Pagedale. Krehmeyer's group has developed a number of projects using the low-income housing tax credit.
File photo I Jason Rosenbaum I St. Louis Public Radio
Beyond Housing's Chris Krehmeyer stands in a vacant unit inside Rosie Shields Manor in Pagedale. Krehmeyer's group has developed a number of projects using the low-income housing tax credit.

Missouri Gov. Eric Greitens cast a key vote Friday to block state spending for its low-income housing tax credit program, saying such development efforts “sound nice, but don’t get results.”

The Republican governor is among the state officials who sit on the Missouri Housing Development Commission, which oversees construction projects that receive state assistance, primarily through state tax credits.

The board voted 6-2 to stop the scheduled low-income housing tax credit allocations for 2018. Greitens  called into the meeting to cast the decisive vote by telephone, which is notable because sitting governors rarely take any action at meetings of this commission.

The state’s low-income housing program is one of the largest Missouri tax credits, with roughly $140 million expected to be awarded to developmers this year to match federal low-income housing aid.

The low-income development projects, built around the state, often are earmarked for elderly or disabled residents. But state Auditor Nicole Galloway issued a report in June calling for stricter oversight of all of the state’s tax credit programs, which she said have cost the state $5.4 billion over the past decade.

Former state Sen. Jason Crowell, a Republican from Cape Girardeau, is an interim member of the Missouri Housing Development Commission and led the fight to curb the low-income housing tax credits. Crowell was a leading critic of state tax credit programs while he was in the General Assembly.

Crowell called Friday’s vote “the most fundamental step toward state tax-credit reform’’ in years, and praised Greitens for his support.

“The state of Missouri will no longer subsidize developers and special interests,’’ Crowell said.

Lt. Gov. Mike Parson, also a Republican, sits on the board. He opposed the governor’s action, arguing that the projects spur affordable developments all over the state, especially in rural areas. Backers say the credits are needed to keep rent lower for low-income residents, and note that thousands of people are on waiting lists for low-income housing.

State Treasurer Eric Schmitt also sided with Parson. A representative for Attorney General Josh Hawley voted with the governor.

Friday’s commission debate took place in Columbia before several hundred people, many of them developers and representatives of elderly groups.

State Sen. Jamilah Nasheed, a Democrat from St. Louis, was in the audience and was furious over the board’s decision. She pledged to block Crowell’s confirmation when it comes before the state Senate.

“This is a hard blow to developers in the city of St. Louis and around the state,’’ Nasheed said. “I have seen the dramatic changes in neighborhoods in the city of St. Louis. If it wasn’t for low-income housing tax credits, we wouldn’t have The Grove that’s thriving and developing now. We wouldn’t have a North Sarah development that’s thriving. We wouldn’t have a Salisbury development that’s thriving.”

Nasheed said the board’s decision also improperly supersedes the General Assembly, which allocates the funding for the state tax credit programs: “They usurped our power.”

Stephen Acree, president of Rise — a nonprofit group that specializes in affordable housing -- also criticized the commission's action. "By thwarting the will of the legislature, to withhold these resources, seniors, homeless veterans and people with special needs will spend another winter out in the cold, in shelters, or doubled-up with whoever might take them in," he said.

The governor’s special commission on taxes recommended this year that the low-income tax credit program be changed into some sort of loan program.

In his statement issued after Friday’s vote, Greitens said his aim is to “put an end to politics as usual, to save the people of Missouri hundreds of millions of dollars.”

St. Louis Public Radio’s Marshall Griffin contributed information to this story.

Follow Jo on Twitter: @jmannies

Jo Mannies is a freelance journalist and former political reporter at St. Louis Public Radio.