House Budget Committee scraps plan for business incentive fund

Monday, April 20, 2009 | 9:40 p.m. CDT

JEFFERSON CITY — House lawmakers cast a blow to a job-creation plan sponsored by Gov. Jay Nixon during a committee meeting Monday.

The governor's $100 million job-creation incentive program would have provided "forgivable loans" to businesses that pledged to create 100 new jobs in Missouri within the next five years. Nixon had estimated the program would create up to 4,000 jobs. The money was expected to come from budget stabilization funds provided by the federal government.

It had faced criticism from lawmakers in both parties who said the plan didn't provide enough details about how the program would be administered.

On Monday, the House Budget Committee removed all of the money during a day-long hearing and reallocated most of it to one-time projects. The budget bill, along with the three others approved by the committee, has already been considered by the Senate and now moves to the House floor. Once the bills are approved by the House, they must be reconciled in a joint House and Senate committee before being sent to the governor.

The legislature must send the budget to the governor's office by May 8. If the chambers cannot come to an agreement, lawmakers will likely face a special session after the regular session ends May 15.

At this stage of the budget process, a majority of the money cannot be removed unless it is replaced elsewhere in the budget. During the hearing, members of both parties submitted amendments to distribute the $100 million across the state, including:

  • $7.45 million for a 28-bed ward at the Northwest Missouri Psychiatric Rehabilitation Center
  • $5 million for the Kansas City Transit Program
  • $20 million to the University of Missouri System to help fill a maintenance and repair funding gap created earlier in the session

The maintenance and repair money would more closely align the UM System with a 45 percent funding increase given to other state schools earlier in the session, said Rep. Chris Kelly, D-Columbia, who sponsored the amendment.

"All boats ought to rise on the same tide," Kelly said. "Now everybody's up a little bit."

The money would give the UM System a 10 percent increase in repair and maintenance funding instead of the expected 30 percent decrease.

The governor's office argued that the budget stabilization money used by the committee for one-time projects was intended for job creation, not legislators' "pet projects."

"In a time when we have a 25-year high in unemployment, the governor believes investing in job creation should take precedent over pet projects," said Scott Holste, a spokesman for Nixon.

House Budget Committee Chairman Allen Icet, R-Wildwood, said Nixon's job creation program could also be considered a pet project. He said the committee dedicated the funds to good projects and simply had different priorities than the governor.

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