End of Children in Crisis tax credit worries Missouri agencies

After the Missouri General Assembly adjourned in May, the fate of a program aimed at assisting abused and neglected children was sealed.

Despite bipartisan support, lawmakers were unable to pass an extension to the Children in Crisis tax credit. As a result, it ends Aug. 28.

“We were just shocked,” said Martha Gershun, executive director of Jackson County’s Court Appointed Special Advocates. “We believed it was safe because we truly believe Missourians understand how important it is to help children in terrible, terrible situations.”

Agencies that benefited from the tax credit are now left wondering how much funding they could lose and how it will affect the services they provide. And they’re trying to get word out to their donors that they have less than two weeks to donate before the credit expires.

“We don’t know the exact impact, but we’re very worried,” said Gershun, whose organization provides a court-appointed advocate for more than 900 abused and neglected children a year. “Our message is, ‘Give now and you can still receive the credit.’ For 2013 and beyond, it’s going to be a problem.”

Created in 2006, the Children in Crisis tax credit was designed to encourage financial support for organizations that provide services for children who have experienced abuse or neglect. Any donor who gives $100 or more to a qualifying agency can receive a tax credit worth up to 50 percent of their donation.

And the program worked, according to Lisa Mizell, CEO of the Kansas City-based Child Protection Center. She said gifts of $100 or more to her organization jumped from 45 percent of total giving in 2007 to 59 percent in 2010.

“These tax credits have been a great help to CPC,” Mizell said. “Several of our donors have told us that they have increased their gifts in order to take advantage of the tax credits.”

If donations drop, the impact will be felt by children in desperate situations, Gershun noted.

“If organizations like ours are forced to limit services, you’ll see kids languish in foster homes longer, and in many instances they won’t get the support that they need,” she said.

The most frustrating part, Gershun added, is that the tax credit died not because of any opposition. Rather, it fell victim to a political tug of war between House and Senate Republicans over how to rein in the costs of two other tax credit programs: one aimed at rehabbing historic properties, another at encouraging low-income housing.

Gershun and her organization aren’t alone. Tax credits for domestic violence shelters and anti-abortion pregnancy resource centers also will expire this month because of the legislative standoff. One targeted at assisting food pantries expired last year.

After two failed efforts in 2011 at tax credit reform, the Missouri Senate passed a bill during the final week of the 2012 session capping the amount of historic preservation tax credits that can be allocated annually at $75 million, down from $150 million.

In an attempt to force the House to either accept the Senate’s bill or negotiate a compromise, the Senate tied historic tax credit reform to legislation extending the popular “benevolent” tax credits, including the Children in Crisis credit.

“I don’t think there is a single senator who opposes extending these benevolent tax credits,” said Sen. Will Kraus, a Lee’s Summit Republican. “But we had to do something to try to get the House to the negotiating table.”

In the end, the effort failed. House leadership balked at the last-minute plan and the reform effort once again died, taking the benevolent tax credits with it.

“It’s disappointing that this happened,” Kraus acknowledged. “The benevolent tax credits make up such a small portion of the budget but do so much good for the organizations that benefit from them. But we have to get spending on historic and low-income tax credits under control.”

Tax credits currently cost Missouri between $600 million and $700 million a year in revenue. But only a fraction of that figure comes from benevolent credits. In the six years the Children in Crisis credit has been available, it has cost the state a total of roughly $2.5 million.

Kraus said a change in House leadership, along with new members in each legislative chamber, will give tax credit reform a better chance at success next year.

“This is going to be one of my biggest priorities going into 2013,” he said.

However, Gershun is not as optimistic.

“The legislature has repeatedly shown an unwillingness to spend money or effort on Missouri’s poor kids,” she said.