JEFFERSON CITY — Gridlock prevailed over compromise in the Missouri Senate early Thursday, resulting in another failed effort to pass job-creation incentives supported by Gov. Jay Nixon and legislative leaders. Senators quit without voting after more than 10 hours of debate on the legislation that would enlarge some of Missouri's business tax breaks while also imposing new limits on state income tax credits.
The late-night session marked the fifth time in less than two months that senators have taken up the economic development legislation without reaching a resolution.
This time, their grueling session ended with frustration and accusations.
"The Senate is, in my opinion, being held hostage by one or two people," Sen. John Griesheimer, R-Washington, said in a speech after shelving his bill. "No matter what we do, no matter which way we turn, roadblocks are held up."
Griesheimer added: "This place is being shook down — I hate to say it, but I absolutely believe it — by forces outside this building."
Griesheimer did not elaborate on his assertion. But most of his anger was directed at Sen. Jason Crowell, R-Cape Girardeau, who has delayed the bill while pushing for what he describes as greater legislative control over tax credits.
Crowell told reporters later that Griesheimer had engaged in "a tirade of personal accusations" and denied that his steadfast opposition had an impure motive.
"He has accused me of a crime that I am being paid to insist upon oversight and fiscal review of how we spend Missouri taxpayer dollars," Crowell said. "I take offense at that."
Senate President Pro Tem Charlie Shields, R-St. Joseph, said efforts to forge a compromise will continue before the legislative session ends May 15.
"The issue is not dead," Shields said. "We still need an economic development bill, and there are probably reasonable reforms that can be made to tax credits."
Tax credits directly reduce the amount of income taxes due to the state. During the 2008 fiscal year, Missouri forwent nearly $505 million of revenues because of tax credits — a more than 40 percent increase from five years earlier. But supporters say business tax credits can have an overall positive effect on the economy.
As passed previously by the House with Nixon's support, the legislation would eliminate a $60 million cap on the amount of tax credits that can be issued under the Quality Jobs program. The Senate version would raise the cap to $75 million for the program, which offers incentives to businesses that add jobs with at least average wages and health insurance.
Both versions would create a new tax credit for investors in technology-based companies that are in the early stages of development.
They also would create a new tax credit for companies conducting research in certain industries — agricultural biotechnology, plant genomics, medical devices, pharmaceuticals, aerospace and alternative energy, among others. Senators say the new research tax credit is needed to encourage St. Louis-based Monsanto to expand in Missouri instead of Iowa.
To counter the tax credit expansion, a group of Republican senators insisted that the legislation also include new tax credit restraints.
The version pending in the Senate would place an annual cap on the amount of tax credits that can be authorized for each of the state's dozens of incentive programs.
Tax credits for the renovation of historic buildings, for example, would be capped at $75 million annually under the Senate proposal. Those tax credits currently are unlimited, and some developers contend a cap could cripple the program.
Sen. Jeff Smith, D-St. Louis, has threatened to filibuster the bill to prevent the historic preservation tax credits from being capped. House Speaker Ron Richard, R-Joplin, has declared that he won't accept any cap on the program that's less than $150 million annually.
In an attempted concession to Crowell, the Senate legislation also would subject tax credits to the state budget process by requiring an annual allocation of how much money could be authorized for each program.
But Crowell also wants to limit the ability of the Missouri Development Finance Board to issue tax credits. The board gained public attention recently for approving $25 million in tax credits for the Kansas City Chiefs, part of which would be used to finance a new training facility in St. Joseph.
The finance board also is considering tax credits for the proposed Ballpark Village development next to the St. Louis Cardinals stadium.
As written, the Senate bill would cap the board's annual tax credits at $10 million but would allow credits of up to $25 million annually with the approval of three executive branch officials and the House and Senate budget chairmen. That would be a restriction from the board's current powers.
Senators on Thursday defeated Crowell's amendments to impose a hard cap on the board's tax credits of $10 million, $15 million or a mere $1. A dollar cap would have effectively eliminated the board's tax credit authority.