In today's Columbia Daily Tribune, an op-ed piece discusses the problems with the Missouri Housing Development Commission's state tax credit program. Apparently the housing tax credits, which are supposed to be used for low-income and senior housing projects, has been going toward developers who use it as start-up funding for their projects, and then cashing it in for the full tax break:
A recent study ordered by the housing commission found the system does produce beneficial low-cost housing but at a high cost to the state because the tax credits usually are sold to third party investors by developers at steep discounts.
At the end of the day, the full tax credit is not going toward the stated purpose:
Investors buy the credits, providing discounted front money so developers can proceed with projects, then redeem the credits for 100 percent state tax reduction. For every dollar the state gives in tax discounts, only 35 or 40 cents subsidizes housing.
Again it's shown that while tax credit programs may sound beneficial and good, at the end of the day they aren't used for their stated purposes. The taxpayers are picking up the bill for investments that should be covered by private investors' own money.