Pension changes, Ford incentives stall in Missouri

Friday, July 2, 2010 | 3:42 p.m. CDT; updated 4:12 p.m. CDT, Saturday, July 3, 2010

JEFFERSON CITY — Agreement appeared to be fracturing Thursday among Missouri lawmakers over plans to offer tax incentives to automakers and overhaul the state employee retirement system.

First, the automotive tax incentives aimed at Ford Motor Co. blew a tire when a Senate committee refused to endorse the plan. Then, the pension overhaul faced extended questioning by the full Senate, which twice this year has signed off on similar proposals. Senators eventually approved a different version of the retirement legislation than the one passed by the House earlier this week.

Gov. Jay Nixon said he ordered lawmakers to return to the Capitol because there was consensus over the bills, but with lawmakers returning next week, hopes for a speedy special legislative session were shattering.

Republican Sen. John Griesheimer said the Democratic governor should have worked more diligently to ensure there was consensus on the details of both the automotive incentives and the pension changes before calling the special session.

"I've been very supportive of the governor, as a Republican, but he pulled the trigger on this too fast," said Griesheimer, of Washington.

Senate leaders said there still is general agreement to pass the bills, but the situation is complicated because the approval of one bill depends on the other.

"This is a very difficult process, and it's almost like a juggler juggling eggs," said Senate Majority Leader Kevin Engler, R-Farmington.

The tax incentive legislation is aimed at Ford Motor Co. and would offer up to $15 million annually in tax breaks for the automotive industry. It already passed the House and a Senate economic development committee, but a Senate panel charged with reviewing the financial effect of legislation adjourned Thursday without voting on the bill, thus blocking it from reaching the Senate floor.

State Sen. Chuck Purgason, who is chairman of the Senate Governmental Accountability and Fiscal Oversight Committee, told reporters that he wants to kill the bill because of its cost.

"I'm frustrated that we're even here to begin with," said Purgason, R-Caulfield. "We're sitting here in a situation of figuring if we're going to give a private company tax credits at a time when we're looking at a $1 billion shortfall next year."

Purgason added: "Revenues continue to decline, and our answer is to spend more money. It doesn't make any sense."

Purgason, who is running for U.S. Senate, is one of several state lawmakers who have tried unsuccessfully over the past couple years to rein in Missouri's expansive tax credit programs. Purgason denied that Thursday's action had anything to do with his campaign.

The proposed automotive incentives are not tax credits but would similarly reduce taxes paid to the state. The legislation would let automotive manufacturers keep all or a portion of the employee withholding taxes they normally would pay Missouri if they make factory improvements for a new or modified product.

The tax breaks are targeted primarily at Ford's Claycomo assembly plant near Kansas City, which employs about 3,700 people to make the F-150 truck, Ford Escape and its twin Mercury Mariner, and the Mazda Tribute. Local union leaders have said Ford plans to cease making sport utility vehicles there by the end of next year, and Missouri officials say Ford plans to make a decision soon about where to build some its new models.

Ford officials have declined to comment about the company's plans for the Claycomo plant or future products.

For the pension overhaul, the House and Senate have approved competing plans.

Senators endorsed a new board to oversee the investments of the Missouri State Employees' Retirement System and a separate pension system for the Department of Transportation and Highway Patrol. The Senate plan also would require employees to spend more time working for the state before qualifying for a pension.

The House's version scraps the investment board and does not require people to work more to qualify for the pension.

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