Mo. lawmakers give mixed results on business aid

Written by Muleskinner Staff

(JEFFERSON CITY, Mo., AP) — Missouri lawmakers revamped four of the state’s main business incentives on the final day of their legislative session, but failed Friday to pass a broader measure that would have scaled back costly tax credits for developers.

The overhaul of Missouri’s current job-creation incentives flew quietly through the House with less than two hours remaining before the session’s mandatory adjournment — a sharp contrast to the public flame-out of the broader tax credit measure in the Senate earlier in the day.
The mixed results on Missouri’s economic development initiatives mirrored the final day’s general tone.
A high-profile proposal that would have asked voters to impose a 1 cent sales tax for transportation stalled in the Senate under opposition from some anti-tax Republicans. Yet lawmakers referred a proposed constitutional amendment to the 2014 ballot that would allow prosecutors to use evidence of a defendant’s past crimes in child sex abuse cases.
Legislators also gave final approval to dozens of other bills, including a budget patch that could prevent cuts to early childhood programs and medical care for the blind.
Republicans this year held their largest legislative majorities since the Civil War era. Many GOP priorities had been sent to Democratic Gov. Jay Nixon before Friday, including a projected $700 million income tax cut that Nixon indicated he will likely veto.
Republicans have also passed new labor organization restrictions, numerous pro-gun measures, a change to the state’s education laws governing unaccredited schools and a bill that would restock an insolvent state fund for disabled workers.
“We showed leadership this year,” said Senate President Pro Tem Tom Dempsey, R-St. Charles, who held his post-session news conference four hours before the session’s official 6 p.m. close.
House Speaker Tim Jones, R-Eureka, called it one of the most productive sessions in recent memory.
“It was a session of historic accomplishments and substantive reforms that will improve the quality of life for all Missouri families and pave the way for a better business environment,” Jones said.
Lawmakers repeatedly defeated Nixon’s top priority: a proposed Medicaid expansion that would have tapped more than $900 million of federal funds to cover about 260,000 lower-income adults under the provisions of President Barack Obama’s health care law.
Nixon praised the Legislature for increasing funding for education and mental health. But he said “this session fell far short of what Missourians have a right to expect,” because lawmakers failed to expand Medicaid or pass broad-based tax credit reform.
Senate Minority Leader Jolie Justus, D-Kansas City, called it a session of “lost opportunities and misplaced priorities.” House Minority Leader Jake Hummel, D-St. Louis, said it was “an absolute abject failure” when Republicans “let Medicaid expansion die.”
The business incentive measure passed Friday would consolidate the current Quality Jobs program and three other tax breaks into the new Missouri Works program, which was one of Nixon’s priorities. Like Quality Jobs, the new program would offer tax breaks to businesses that add a certain number of jobs that meet particular wage thresholds and include health benefits. But it would lower job and wage thresholds for businesses to qualify and grant greater discretion to the Department of Economic Development in determining how much money the businesses should get.
Missouri Works would be capped at $106 million next year and gradually rise to $116 million in 2016 and thereafter. That’s slightly lower than the combined cap of $128 million annually under the four current incentives being eliminated.
A separate plan that failed Friday would have created new incentives targeted at computer data centers, investors in startup technology companies and exporters who use Missouri airports to ship cargo to foreign countries. It also would have renewed a tax credit for a developer who has amassed large swaths of land in north St. Louis and scaled back existing tax credits for developers of low-income housing and historic buildings statewide.
The House voted 122-32 Friday for a plan that would have reduced annual tax credits for large historic preservation projects to $90 million from the current cap of about $140 million and imposed a new $10 million cap on smaller projects. The measure would have gradually lowered the cap for the state’s main low-income housing tax credit to $110 million annually from the current $135 million.
Overall, the legislation scaling back developer tax breaks and creating new incentives for certain business sectors was projected to save the state almost $460 million over the next 15 years.
But Sen. Brad Lager, R-Savannah, said the restrictions on developer tax credits did not go far enough. He accused developers of exerting undue influence over House members and, at one point during a filibuster, asserted that “the leadership in the House is corrupt.”
“Just because the House continues to defend a handful of developers, a handful of donors, doesn’t mean the Senate should cave to a bad deal,” Lager said.
Sen. Eric Schmitt, who championed the tax-credit overhaul, said it represented the best chance lawmakers might ever get to reform the state’s tax credit programs. But the bill failed — just as similar measures have in each of the past three annual regular sessions and in a fall 2011 special session.
“Dear Lord, every year somebody’s waiting for this fairy-tale scenario to drop from the sky, to have the perfect bill,” bemoaned Schmitt, R-Glendale. “I have news for folks … we don’t really live in that world.”
Associated Press writers Chris Blank and Jordan Shapiro contributed to this report.