Missouri lawmakers hold special session on Ford incentives

Thursday, June 24, 2010 | 5:43 p.m. CDT; updated 12:02 p.m. CDT, Friday, June 25, 2010

JEFFERSON CITY — Missouri lawmakers convened a special session Thursday to consider whether to give money to automakers and take it away from future state employees.

The plan to channel incentives to Ford Motor Co. seemed to have majority support. But its drive toward passage depends on whether lawmakers can resolve disagreements about how to revamp Missouri's main pension systems.

Gov. Jay Nixon has said the incentive package — offering up to $100 million over 10 years to Ford, plus additional money to suppliers — is essential to encouraging Ford to place a new vehicle model at its Kansas City area assembly plant.

Senators said the savings from the proposed retirement plan changes are needed before they agree to saddle the state with the additional costs of manufacturing incentives.

Although legislation was introduced Thursday, most of the legislative work won't begin until next week.

Senate President Pro Tem Charlie Shields, R-St. Joseph, said the special session could last two to three weeks.

The centerpiece would allow automakers to keep the employee withholding taxes they normally would pay to Missouri if they make factory improvements for a new product, or they would keep half those taxes if they modify or expand an existing product line. The $10 million of annual incentives could last for 10 years for new products or seven years for modified products.

Suppliers to those automakers also could keep withholding taxes for new employees. The program's total incentives would be capped at $15 million annually.

Plans call for the House to pass the bill first, with the Senate to consider it next.

The retirement legislation is expected to follow a similar route. But the House-Senate divisions were apparent with separate pension proposals being filed in each chamber.

Both versions would require employees hired after Jan. 1, 2011, to contribute 4 percent from each paycheck toward their retirement benefits. And both versions would push back the age at which state employees could retire.

But they differ on the oversight of Missouri's pension systems. The Senate bill would allow the creation of a new investment board to manage money for both the Missouri State Employees Retirement System and a separate retirement system for Highway Patrol and Transportation Department employees.

Sponsor Sen. Jason Crowell, R-Cape Girardeau, said the pension systems could reap nearly $30 million more annually by applying the expertise of the MOSERS investment managers to the patrol and transportation fund, which has not performed as well.

But some House members have expressed concerns about the common investment board, and the House legislation introduced Thursday does not include the board.

Some lawmakers expressed frustration that the pension changes were on the agenda for the special session.

"I don't understand the relationship between a retirement bill and a Ford bill, but apparently Gov. Nixon and Sen. Crowell do," said Rep. Chris Kelly, D-Columbia.

Sen. Tim Green, D-St. Louis, bristled at references to "pension reform."

"I call it pension reduction," Green said.

Senate Majority Leader Kevin Engler, R-Farmington, said if lawmakers did not act now to change Missouri's lucrative benefit package for employees, additional layoffs or more dramatic pension changes might be required in the future.

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