Proposed tax credit boost may be lucrative for Missouri anti-abortion centers, donors
Anti-abortion advocates gathered at the Midwest March for Life in front of the Missouri State Capitol on May 1, 2024, in Jefferson City (Anna Spoerre/Missouri Independent).
When the Missouri House signed off on a $1.3 billion tax cut package last week, it included a provision creating a 100% tax credit for donations to pregnancy resource centers, maternity homes and diaper banks.
The credits — allowing up to $50,000 in donations to be accepted in place of taxes owed — are seen by supporters as a way to increase aid to pregnant women in need following Missourians' decision to legalize abortion last November.
'There's no time in the history of Missouri that I can recall where there's a better time to support life,' state Rep. Brad Christ, a Republican from St. Louis, said during a committee hearing last month.
But pregnancy resource centers have proven controversial around the country, accused of providing women with inaccurate medical information in an effort to discourage them from seeking abortions. And critics have raised concerns that allowing Missourians to satisfy their entire tax bill by donating to anti-abortion organizations could create significant budget uncertainty.
'Even if you view this totally in isolation and don't pay any mind through the mission of the organizations at hand here, this is egregious policy' said Carl Davis, research director at the left-leaning Institute on Taxation and Economic Policy. 'There's no reason to do it this way.'
The tax credit for pregnancy resource centers was set at 70% in 2021, up from 50%. Maternity homes also currently sit at 70%, and diaper banks are at 50%.
Following the 2022 change, the Pregnancy Help Center of Central Missouri in Jefferson City saw a $100,000 increase in tax credit-eligible donations, its executive director, Leslie Kerns, told the House special committee on tax reform.
The original bill's sponsor, state Rep. Christopher Warwick, a Republican from Bolivar, did not respond to an interview request, but during a House hearing he described the legislation as 'a simple bill' that redirects the additional 30% the government has been getting to women in need.
'We need to keep government out of a lot of things, and this is one of them,' Warwick said during the hearing in which he was asked if he would include a provision mandating oversight of how the donations are spent. 'We need to be able to make sure that donors are getting their resources directly to those that need it, and when we're talking about pregnancies and women who are looking for help, this bill allows that and puts donors right in front of those who need it most.'
A number of tax credit programs in Missouri are built to incentivize donations to certain causes, including the Developmental Disability Care Provider Tax Credit, Domestic Violence Shelter or Rape Crisis Center Tax Credit and 'Champion for Children' tax credit.
But the credit to pregnancy resource centers tends to get the most attention because of its involvement in Missouri's longstanding battle over abortion. Pregnancy resource centers are not medical facilities but rather provide services including free pregnancy tests, prenatal vitamins, parenting classes, ultrasounds and counseling.
While 100% tax credits — meaning the donor reduces their tax bill the exact amount they gave — aren't unheard of, they are usually capped.
What's different about this year's proposal is that while tax credit claims remain capped at $50,000 per individual contribution, there would not be a cap at the aggregate level, meaning there is no limit to how many people can claim credits.
Without an aggregate cap, it would take 200 people donating $50,000 to cut into Missouri's budget by $10 million. If 1,000 people took advantage of the full credit it would cost the state $50 million. The state's total tax revenue in the most recent fiscal year was about $14.2 billion.
Missouri Republicans take victory lap as legislative session heads into its home stretch
Sam Lee finds any concerns about the fiscal impact overblown.
The longtime anti-abortion activist and lobbyist pointed to a January 2024 tax credit analysis by the Missouri Department of Social Services concluding that for every dollar redeemed by taxpayers with the tax credit, the state saves $1.77. The report explained the savings by concluding the donations assist women with unplanned pregnancies 'who may have, otherwise, accessed state assistance.'
Last fiscal year, about $7.5 million was claimed under this tax credit.
Lee noted there is no aggregate cap for pregnancy resource center tax credits under the current law and donations still remain far below what's directed to other programs that do have a cap, like the private school tax credit program MoScholars.
That tax credit program is set at 100% and draws from general fund dollars to pay for private school tuition. It's capped at $75 million annually.
But Davis, with the Institute on Taxation and Economic Policy, said this year's pregnancy resource center proposal has the potential to create significant budget uncertainty because, unlike MoScholars, it would allow for more than just cash donations to the centers.
Stocks, bonds and property could qualify as well, which Davis said could lead to a 'glut of donations' to centers as donors use the program to avoid paying capital gains taxes.
Davis recently published a brief laying out his apprehensions after a ProPublica story alerted him to the legislation.
The credit for stock or other assets that have appreciated in value would be for the market value at the time of the donation. If sold for the same amount, the owner would pay federal tax on the profit of up to 20% as well as state income tax of up to 4.7%, depending on income level.
'What I'm concerned about is that it would be exceptionally easy for taxpayers to pair this 100% match with avoidance of capital gains tax,' he said. 'And then you end up with this scenario of basically personal profiteering off a tax shelter that would be set up in the state.'
Davis worries without an aggregate cap on donations in Missouri, the 100% credit could inspire people to game the system.
'This is not good policy. This is not neutral policy. This is very distortionary,' he said. 'It encourages opportunists to come out of the woodwork and to take part in this, not because they care about the cause at the heart of this bill at all, but just because they want to make a buck for themselves.'
Pregnancy resource centers, frequently affiliated with religious organizations and sometimes situated right next to the state's handful of Planned Parenthood clinics, are often criticized for their efforts to dissuade or even hinder women from accessing abortions.
Supporters say the centers help women uncertain about continuing a pregnancy with the resources to feel more secure in the decision.
Kerns, with the Jefferson City center, said during the hearing that her center, like all pregnancy resource centers, is not allowed to perform, induce or refer for abortions.
She said they have women mark where they're at on a 'decision guide' to see if they're 'abortion-minded.' If they show an interest in abortion, they're given an information sheet about abortion that includes the procedure's risks.
In many cases, however, the information women are provided at pregnancy resource centers is inaccurate and skewed to influence their decision, said Michele Landeau, chief operating officer of Hope Clinic, an Illinois abortion clinic across the river from St. Louis.
'We see a lot of people who have visited these anti abortion centers that receive these tax credits, who are given misinformation,' Landeu said. 'And who essentially end up delaying their care because of the misinformation that they receive from these centers.'
Landeau said about half of Hope Clinic's patients are from Missouri. Patients have told her that pregnancy resource centers gave them incorrect gestational ages or told them incorrectly that they weren't allowed to travel for abortions.
'This harm will not only continue, but it will be uplifted, essentially, by these additional tax credits,' said Landeau, who lives in Missouri.
For the 2025 fiscal year, there are 82 pregnancy resource centers eligible to benefit from the current tax credit. There are 20 maternity homes and six diaper banks.
Lee believes the legalization of abortion in Missouri last fall was a catalyst in the renewed desire by lawmakers to support pregnancy resource centers.
A Jackson County judge recently struck down several of the state's abortion regulations, including a law that patients must wait 72 hours before going in for an initial appointment and actually undergoing an abortion.
Lee said this puts added urgency on pregnancy resource center staff.
'They realize they need to have staff available, if not 24/7, at least every day to respond to women who in the near future could get an abortion that day,' Lee said. 'And that's not been the situation in Missouri for years and years.'
Republican Gov. Mike Kehoe proposed a state budget increase of $4 million to federal Temporary Assistance for Needy Families funds that goes to Alternatives to Abortion. It would earmark $12.6 million for programs that provide services, including counseling, to women 'at or below 185% of the federal poverty level, to assist in carrying their unborn child to term rather than having an abortion.'
A 2004 study of more than 1,200 women who had abortions found that 73% said they decided to undergo the procedure in part because they could not afford to have a baby, according to a study by the Guttmacher Institute, a reproductive rights research group.
The 'Turnaway Study,' a widely-referenced piece of research published by Advancing New Standards in Reproductive Health, found that women who were denied abortions, many of whom were already mothers, experienced an increase in household poverty over the next four years. It also found that children born following a denied abortion were more likely to live below the federal poverty line than those born to women who previously had an abortion.
The anti-abortion movement in Missouri is not solely focused on regulating the procedure, Lee said. Efforts to help reduce abortions have taken a number of shapes through the years, including by extending post-partum Medicaid coverage.
The 100% tax credits, he said, are one more piece.
'There's just not one magic bullet here,' Lee said, 'which will reduce abortions.'
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