What’s the Rush to Restore the LIHTC?
As this year’s legislative session draws to a close, our lawmakers in Jefferson City are again acting as if any unspent money will burn holes in their pockets. Before passing the largest budget in state history, members of the House of Representatives jumped at the chance to potentially restart Missouri’s low-income housing tax credit (LIHTC) program. Despite the LITHC’s heavy cost to Missouri taxpayers, many of our elected officials appear content carrying water for special interests as opposed to truly helping the state’s many low-income individuals.
During the debate on the House floor, several legislators discussed the program’s benefits for communities and low-income individuals alike. It bears repeating that individuals can support increasing the supply of affordable housing without supporting the LIHTC. The LIHTC program is notoriously expensive given its low return on investment. One legislator commented that the last year the Missouri program issued credits, the state’s investment of more than $160 million only resulted in around 1,000 low-income developments. When combined with the federal portion of the credit, taxpayers are on average subsidizing each new development to the tune of at least $320,000. If most Missourians wouldn’t spend that amount on their own homes, why should they be expected to subsidize that amount for others?
Additionally, multiple legislators discussed the reform efforts as a way to improve the program’s efficiency. While it was good to hear legislators admit many of the faults of the program outlined in multiple auditor reports, their “reforms” are not enough. If policymakers accept the program is currently ineffective and inefficient, why not consider a different program that could work even better? As I’ve said before, the LIHTC program is far from the only way to improve housing options for Missouri’s low-income population. And even if it was, why wouldn’t lawmakers discuss including a provision that guarantees the program is revisited in future years to ensure newly added reforms offer measurable improvement?
Of course, the best outcome for Missouri taxpayers would be to leave the state’s LIHTC program dormant. This would save more than a billion dollars over a decade. With such little time left remaining this legislative session, why are lawmakers rushing to restart the LIHTC program when there is still a better deal for taxpayers to be made? Every bad idea deserves an endpoint; let this year be the LIHTC’s.