Missouri House, Senate dispute over business incentives deal

Wednesday, September 21, 2011 | 6:16 p.m. CDT; updated 8:00 p.m. CDT, Wednesday, September 21, 2011

JEFFERSON CITY — Republican House leaders declared they had struck a "sensible compromise" Wednesday with Gov. Jay Nixon on a proposed overhaul of Missouri's business incentives. But the proclamation only heightened tensions with senators, who said they weren't involved in the talks or part of any supposed deal.

The verbal jousting highlighted the ping-pong-match atmosphere of Missouri's special legislation session, where House and Senate leaders have taken turns expressing umbrage at the other side's changes to what they had jointly promoted this summer as a consensus plan to spur job-creation in Missouri.

House Speaker Steven Tilley said he plans to hold a House vote Friday on the latest proposal, then essentially end the special session. That didn't sit well with senators, who had passed their own version of the bill on a bipartisan vote last week and whose concurrence in the House changes would be needed to send the legislation to the governor.

Sen. Kevin Engler, R-Farmington, called the House's plan a "take it or leave it approach" designed to "stick it" to the Senate when assigning blame for the potential demise of the special session, which began three weeks ago.

Nixon called lawmakers into an extraordinary session after Tilley, Farmington and Senate President Pro Tem Leader Rob Mayer, R-Dexter, flew around the state this summer announcing that they had reached an agreement on a job-creation proposal that would scale back some of Missouri's existing tax credits while creating new incentives for businesses. But it quickly became apparent that many rank-and-file Republican senators had concerns about the bill.

The version ultimately passed by the Senate included deeper cuts than originally proposed to an existing tax credit for the developers of low-income housing. It also significantly pared back a proposed tax credit intended to draw international cargo flights to Lambert-St. Louis International Airport. The Senate version went beyond the original deal to include a Nixon-backed plan called Compete Missouri, which rolls several of Missouri's current business incentives into a single program with easier-to-meet eligibility standards and new authority for the Department of Economic Development to provide upfront cash to businesses.

State Rep. John Diehl, R-Town and Country, a lead negotiator on the legislation, declared earlier this week that the Senate plan was "dead on arrival" and voiced particular opposition to the Compete Missouri proposal because he said it granted too much discretion to the economic development agency.

But Diehl said Wednesday that the House's revised plan would include Compete Missouri, with greater accountability measures and a reduced cap on tax credits, starting at $86 million this year instead of $111 million as in the Senate proposal. The difference is attributable to the House's decision to keep the existing BUILD incentive for companies that undertake substantial building projects as a separate program capped at $25 million annually.

Whereas the Senate plan would have allowed warehouses associated with the St. Louis cargo hub to seek incentives under Compete Missouri, the House plan would direct them through the BUILD program.

The House plan would set a $100 million annual cap on Missouri's main low-income housing tax credit; the Senate plan seeks to impose an annual cap that would gradually decline from $110 million this year to $70 million by 2015. Diehl said the House plan also deletes the Aug. 28, 2018, expiration dates that the Senate had attached to programs providing tax credits for low-income housing and the renovation of historic buildings.

That change "would make it impossible to pass it over here," Mayer said.

Nixon spokesman Sam Murphey said Wednesday that the governor supports the House proposal. But Nixon also praised the Senate version when it was passed last week.

Diehl said that since the governor now backs the House version, it should be moved swiftly to his desk.

"We believe the House proposal represents a sensible compromise that incorporates priorities from all sides and creates the strong taxpayer protections that we have sought all along," Diehl said.


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