JEFFERSON CITY - Missouri parents with young children have emerged as one of the potential winners in this year's tax-cut contest in the state legislature.
Under a bill the House passed Tuesday, members overwhelmingly approved tax credits for businesses who provide day care, parents who send their children to day care and those who stay at home with their children.
Money to fund these tax credits would come from the general revenue, using the expected budget surplus for this year.
"We have a constitutional lid in this state. We are $120 million over that limit for this year," said House Speaker Pro Tem Jim Kreider, D-Nixa. "So, we...need to enact a tax cut with at least $120 million. So this package is almost exactly the amount we need to cut taxes in a responsible way."
Businesses would receive a 10 percent tax credit for the costs of providing day-care services. This bill would benefit both employers and parents, said Rep. Mary Bland, D-Kansas City.
"Just it's parents feeling more comfortable about the well-being of their child," said Bland, who sponsored the bill. "And for employers to benefit from that when a person is comfortable and not stressed out about their children, they can be of more service to their employers."
Bland's portion of the bill only would cost the state up to $30 million, but Kreider tacked on two provisions that boosted the cost of the bill to $143 million and put it into competition with other measures fighting for the state refunds.
Currently, parents can claim from 20 to 30 percent of child-care expenditures on their federal income tax returns. This bill would just add another line to Missouri tax forms and allow parents to make this same deduction from their state taxes, Kreider said.
Some legislators said a tax credit for day-care services would encourage families to go to work. Kreider, however, added a provision to the bill that would give spouses a $400 credit for staying home and taking care of the children.
This provision swayed at least one member's vote. Rep. Glenn Hall, R-Grain Valley, was the only one who voted against the bill Tuesday morning, but he went to change his vote after he learned that parents who stayed home also would receive a tax credit.
Finally, the bill would establish a tobacco settlement fund for the state to pay for more day-care tax credits.
House Majority Leader Gracia Backer, D-New Bloomfield, said she would like to use part of any tobacco-settlement money to give parents a $1,000 tax credit for each child in full-time day care and $500 for part-time day care.
The governor has proposed a competing tax-cut plan -- one that would give a tax credit for housing costs. He was noncommittal about whether he would sign a bill giving that revenue to day care.
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