Missouri House committee declines to vote on business bill

Thursday, September 22, 2011 | 8:51 p.m. CDT

JEFFERSON CITY— Concerns appeared to multiply Thursday about an economic development bill at the center of Missouri's special legislative session, leading majority party Republicans to cancel a scheduled vote and causing many lawmakers to wonder if it was time to simply give up on negotiations and go home.

"There is not agreement on the economic development bill," House Majority Leader Tim Jones, R-Eureka, said on Thursday night.

The House Economic Development Committee adjourned a meeting Thursday without voting on the legislation that would pare back Missouri's existing tax credits. It would also create a variety of new incentives for businesses to open shop in Missouri, expand their payrolls or ship their products internationally through Lambert-St. Louis International Airport.

The inaction by the House committee means the legislation remains stuck and cannot be taken up for debate Friday by the full House as originally scheduled. House and Senate leaders have previously suggested that they are likely to end the special session Friday if they remain at odds. Some lawmakers though left open the possibility Thursday that the session could drag on into ensuing weeks if a consensus seemed possible.

Earlier Thursday, Senate leaders distributed a list of six objections to a House version of the legislation, topped by the fact that the bill would allow tax credits to continue indefinitely for the development of low-income housing and the renovation of historic buildings. A Senate version passed last week would set an Aug. 28, 2018 expiration date on the programs — a provision referred to as a "sunset."

"The sunsets on the historic preservation and low-income tax credit programs are critical to us taking action in the Senate," Senate Majority Leader Tom Dempsey, R-St. Charles, said. "From a policy perspective, in trying to get a bill through the Senate or pass a bill, they have to be there."

Yet House leaders were equally adamant that they are not willing to set an arbitrary end for the two programs, which waived a combined $250 million of taxes in 2010. House Speaker Steven Tilley said by placing an automatic end date on the programs, any future senator could halt their reauthorization by simply filibustering a bill — a tactic that some senators have mastered.

"Why in the world, when I know the Senate's broken, would I give them the authority to let one senator kill programs that I think are actually good?" Tilley, R-Perryville, asked rhetorically to reporters.

Some lawmakers also said Thursday that they were growing increasingly wary of authorizing new business incentives because of the recent financial problems of a company that had pledged to open an artificial sweetener factory in Moberly with the aid of government incentives.

When he announced the deal last year, Gov. Jay Nixon said Mamtek U.S. Inc. could eventually employ more than 600 people at the plant. Moberly issued $39 million of industrial bonds for the facility, and the state pledged $17 million of aid. But the plant remains unfinished, and Mamtek recently missed its first bond payment, leaving the city on the hook for it.

"This Mamtek issue has really become a flash point of the special session," Jones said. He said House members are hesitant to pass anything giving the governor more authority and discretion over any more economic development projects.

From the perspective of House leaders, that means a reluctance to approve Nixon's "Compete Missouri" plan, which would roll several existing business incentives into a single program with easier-to-meet eligibility thresholds. It would also give the Department of Economic Development the authority to give upfront cash to businesses.

The Senate has strongly supported that plan, citing its requirements that incentives be tied to job creation and be contingent on projections showing a greater benefit than cost to the state.

But Senate President Pro Tem Rob Mayer said Mamtek's troubles "dampens the enthusiasm" to create new incentives for a St. Louis air cargo hub.

Although the Mamtek concerns are new, the dispute over expiration dates for the two developer tax credits is one of the reasons why lawmakers were unable to pass an economic development bill during their regular session that ended in May. Republican House and Senate leaders kept negotiating after the session ended, and they announced in July that they had reached an agreement on a plan that could be considered in a special session. Nixon then called lawmakers into an extraordinary session that started Sept. 6.

That mid-summer agreement included an Aug. 28, 2018, expiration date for the historic preservation and low-income housing tax credits. It also included $360 million of new tax credits intended to transform the St. Louis airport into a cargo hub. And it proposed to eliminate a tax credit for low-income elderly and seniors who live in rental housing.

But Senate leaders were unable to get the plan through their chamber. Instead, the Senate passed a bill last week that continued the tax breaks for low-income renters, scaled back air cargo tax breaks to $60 million and added the Compete Missouri plan. House leaders countered with their own proposal this week that not only drops the expiration dates for developer tax credits but also revises the Compete Missouri plan and the tax breaks available for warehouses associated with air cargo exporters.

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