Benefits of Tax Credits Concentrated in Urban Regions, Costs Diffused Throughout Missouri

Last week, I spoke to Roseann Moring at the Springfield News-Leader about the Tax Credit Review Commission‘s recent recommendations. (Here is a link to her article.) Following our conversation, I used the Show-Me Institute’s Show-Me Living: Tax Credits web tool to look at Springfield’s share of the tax credits issued.

As a percentage of the total amount issued, Springfield is issued a smaller amount of tax credits than other urban areas. Most of the recipient projects are located in Saint Louis and Kansas City, so residents of those areas receive more of the benefits of tax credits. However, Springfield residents still have to shoulder the costs of these programs through their state taxes. It’s a case of concentrated benefits and diffused costs. Most of the benefits are concentrated on the residents of Saint Louis and Kansas City, and the costs are diffused on all Missouri taxpayers.

This difference is partly attributable to the fact that Springfield has a smaller population than Saint Louis and Kansas City, but there may be other factors. (Senate districts in Missouri have an average of about 176,000 people, and the Springfield metropolitan area is divided into two senate districts, whereas Kansas City is divided into four and Saint Louis is divided into eight.)

Trend of Percentage of Tax Credits Issued, by Region

The chart below shows the same information in terms of total amount issued. For the year 2010 to date, projects in the Springfield region (Dist. 20 & 30) have only been issued $141,875 in tax credits. For comparison, projects in Saint Louis (Dist. 1, 4, 5, 7, 13, 14, 15, 24) have been issued $4,354,456, and projects in Kansas City have been issued $15,962,032.

Trend of Amount of Tax Credits Issued, by Region

The Tax Credit Review Commission will deliver its final report to the governor today.