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UPDATE: Missouri governor to sign Ford tax break bill

Wednesday, July 14, 2010 | 8:01 p.m. CDT

 JEFFERSON CITY — Missouri lawmakers gave final approval Wednesday to tax breaks aimed at enticing Ford Motor Co. to continue making vehicles at a Kansas City-area plant after an exasperated senator ended a more than 20-hour filibuster.

Gov. Jay Nixon plans to sign the legislation into law Thursday at a union hall near the factory, capping work on the centerpiece of the special session he called.

The automaker incentives would let manufacturers keep employee withholding taxes they normally would pay Missouri if they improve their factories for new or expanded product lines. It's targeted primarily at Ford's Claycomo plant, which employs about 3,700 people to make pickup trucks and sport utility vehicles.

But the attempt to save Ford's private-sector jobs would be financed from the paychecks of new public-sector employees. That's because the automotive legislation is linked to a separate bill passed Wednesday, requiring new state employees to start paying into their pension funds.

Over 10 years, the automaker incentives could cost Missouri $150 million. The pension changes could save a projected $659 million over the next decade for three of Missouri's main retirement systems. It would require state employees hired after January 2011 to contribute 4 percent of their paychecks toward the pension fund, delay their standard retirement age and require them to work longer to gain eligibility for a pension.

The Senate passed the automaker incentives 20-7 Wednesday after Sen. Chuck Purgason, R-Caulfield, gave up on his all-night filibuster in frustration. The House later gave the bill final approval 101-40.

Supporters said the auto incentives are essential if Missouri hopes to persuade Ford to place a new product line at the Claycomo plant, which local union officials siad is to quit making its current sport utility vehicles by the end of next year.

Sen. Luann Ridgeway, R-Smithville, whose district includes the factory, said Wednesday that Ford executives told her they are willing to retool the plant with the help of incentives.

Nixon spokesman Sam Murphey said the governor had "a positive and productive conversation" with Ford President Alan Mulally after Wednesday's legislative votes.

Ford spokeswoman Marcey Evans stopped short of any promise, but she congratulated Missouri officials on passage of the legislation and said: "These public partnership benefits certainly will be factored into the equation as we evaluate our business model and opportunities we have for future product sourcing."

Purgason, who has been appealing to tea party activists in a Republican primary bid for the U.S. Senate, argued that the bill took a wrong approach to economic development. He said broad-based tax cuts, a repeal of Missouri's income tax and a "right to work" law for employees would do more for Missouri's economy than tax breaks targeted for specific big businesses.

During his filibuster, Purgason read e-mails from people supporting his efforts, read books and discussed the history of the American colonial opposition to the British leading up to the Boston Tea Party, which he said included frustration that a company lobbied the government for a tax break to unfairly compete.

He received occasional help from a few fellow Republicans, including state Rep. Jack Goodman of Mount Vernon, who is running for a southwest Missouri congressional seat. But Purgason gave up when none of the few remaining senators in the chamber wanted to talk with him any longer about his assertion that the incentives violate free-market policies.

"I believe this is a core Republican principle, and to be fighting my own party on it was frustrating," Purgason said while seated in his office shortly after the Senate vote.

Several Republican senators said they empathized with Purgason but believed the benefit of the pension overhaul and the Ford jobs outweighed their concerns about expanding Missouri's tax breaks in the midst of a budget troubles.

"The trickle-down effect of the potential loss of these jobs would be devastating for our state," Ridgeway said.

The pension legislation also sparked passionate debate from some lawmakers. Opponents argued state employees were getting squeezed further after Missouri already has eliminated 2,500 positions in the past year and a half.

"Today's victim is every new state hire that we make," said Sen. Wes Shoemyer, D-Clarence. "This is a radical reform that sends a terrible message to future workers in this state."

But supporters of the pension changes said more drastic action would be needed in the future — affecting not only new but existing employees — if lawmakers did not act now to cut retirement costs.

"We're not doing this to penalize the workers," said Senate Majority Leader Kevin Engler, R-Farmington. "We're doing this so we don't have to make some major, radical shifts."

 


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