COLUMBIA — Gov. Jay Nixon visited the Missouri Career Center in Columbia on Thursday to promote newly signed legislation that could give tax breaks to thousands of Missouri businesses.
Missouri must take “bold, direct action” in fighting the ailing job market, Nixon said at the career center. “For too many months in a row, our economy has been broken."
Nixon signed House Bill 191 on Thursday morning, eliminating Missouri's corporate franchise tax for most of the businesses that pay it and enlarging the tax incentives available for employers who expand their payrolls or plants.
After signing the measure, Nixon departed on a ceremonial tour to promote the measure's job-creation potential. He planned stops in St. Louis and Kansas City, with additional events next week.
The legislation, which passed on the final day of Missouri's legislative session, was the top priority this year for the Democratic governor and for some Republican legislative leaders.
The legislation passed only after supporters of expanded business incentives compromised with lawmakers who fear tax credits are draining the state's budget. The final version includes new limits on tax credits for the renovation of historic buildings and for projects backed by the Missouri Development Finance Board.
The ultimate cost or benefit of the legislation is somewhat unclear; a legislative oversight office had not completed a financial estimate of the measure by Thursday.
Despite the uncertainty, Nixon said that the cost of waiting to sign the bill would be greater than signing it when he did.
He praised the law as a "decisive action to help businesses create jobs."
He highlighted a portion of the legislation that increases eligibility for state job-training incentives.
The law will also increase the asset threshold that triggers Missouri's franchise tax to $10 million from the current $1 million. Nixon has said that will exempt about three-quarters of the roughly 20,000 businesses that currently pay the tax, resulting in a $14.5 million tax cut for small businesses.
The law expands several popular tax credits, including the Quality Jobs Program that applies to employers who add jobs with at least average wages and health benefits. The law raises the cap on Quality Jobs tax credits to $80 million from the current $60 million, giving state economic development officials greater flexibility to target businesses.
The tax-credit cap will be raised to $25 million from the current $15 million for both the New Markets and the Business Use Incentives for Large-Scale Development programs.
New Markets provides tax credits to equity investments in development projects located in areas with significant poverty rates or low incomes. BUILD provides aid for companies to pay off bonds used to build their plants.
Supporters are hopeful the package will encourage expansions by several companies, including St. Louis-based seed maker Monsanto Co. and Lee's Summit-based battery maker Kokam America Inc.
“When businesses want to expand, we want their first thought to be Missouri, not another state,” Nixon said.
But fewer developers may be able to participate in a state program that provides a tax credit equal to 25 percent of the cost of redeveloping historic buildings. The renovation program has functioned as an entitlement for those who qualify. During the first three quarters of Missouri's 2009 fiscal year, the state had redeemed more than $157 million of historic preservation tax credits.
The new law limits the state to approving $140 million annually in historic preservation tax credits for large projects. Renovations costing less than $1.1 million will not be subject to the cap — an exception insisted upon by the program's advocates.
The law also limits the amount of infrastructure tax credits that can be authorized by the Missouri Development Finance Board to $10 million annually, or $25 million if three executive branch officials approve of the higher figure. Previously, the board could issue an unlimited amount of tax credits so long as the executive officials gave their approval.
Missourian reporter Marty Swant contributed to this story.