St. Louis Beacon via johncombest:
State Sen. Jason Crowell, R-Cape Girardeau, was arguably the chief reason an economic development bill — including tax credits for the proposed China cargo hub effort — died during the last legislative session.
And from what he’s heard so far, Crowell isn’t enamored of the “alleged deal” announced earlier this week by state House and Senate Republican leaders.
Since hearing of Wednesday’s news conferences around the state, Crowell said he called the leaders’ offices to ask for copies of the proposed legislation.
“I’ve been told they don’t exist,” Crowell said in a telephone interview. “I don’t vote on five-page summaries.”
The senator added that, in his opinion, it had been “grossly premature to do a fly-around and announce there’s a deal. I don’t know what this deal is.”
Crowell’s concerns could toss a wrench into what area business leaders, legislative Republicans and Gov. Jay Nixon, a Democrat, hope will be swift approval of an economic development package during a special session that the governor has agreed to call. It likely will be held in September.
For the St. Louis region, a cornerstone of the deal is a plan to earmark $360 million in state tax credits to encourage development related to a proposed China cargo hub at Lambert St. Louis International Airport.
VARIOUS TAX BREAKS TARGETED FOR CUTS
The money for that effort, and several other new or existing tax-credit programs, would be amassed by trimming or eliminating other state tax-credit programs. Overall, Missouri Senate and House leaders project that the deal’s proposed tax credit changes should save the state $1.5 billion over 15 years — or roughly $100 million a year.
Those savings come largely from trimming three existing tax-credit programs: historic preservation, low-income housing and a tax break for low-income elderly who rent.
The numbers offered Wednesday by state House Speaker Steve Tilley, R-Perryville, and Senate President Pro Tem Rob Mayer, R-Dexter, call for annual caps of $90 million for the historic-preservation credit and $110 million for low-income housing.
That’s a savings of roughly $95 million a year over the average tax-credit cost of the two programs during the past three years.
The deal also calls for eliminating the tax break for low-income renters, which now costs the state about $57 million a year, according to the state Senate’s research arm.
Other proposed changes include:
• Ending the tax credit for families who engage in overseas adoptions, which now can cost the state up to $2 million a year;
• Capping the “brownfield remediation tax credits,” used to resurrect abandoned industrial or commercial property. The program would initially be limited to $40 million in annual authorizations over the next three years. Beginning in mid-2016, that figure would be reduced to $35 million.
• Barring or restricting “stacking,” where several state tax-credit programs are awarded to the same project.
• Phasing out state tax credits for neighborhood preservation.
Crowell agrees with some of those aims, although he observed that he was hearing that some proposed caps “had more holes…than a southeast Missouri levee.”
But he reaffirmed that his chief complaint long has been that state tax credits are treated differently than other state spending.
In the case of the China hub proposal, Crowell said the project should go through the same appropriations review as state spending for public schools.
Missouri’s spending on tax credits has quadrupled in the last 12 years, he said, while for many years, state aid to public schools has been cut or flat.
SOCIAL-SERVICE PROVIDERS FEAR POOR UNFAIRLY HIT
Backers of some of the tax credits fear that the wrong ones are being targeted for trims or elimination. Alan Erdman, head of Lutheran Family and Children’s Services of Missouri, said he would like to see lawmakers more evenly distribute the tax burden in the state.
“We cannot balance the budget on the backs of the most vulnerable population, be they children or the elderly or the handicapped,” he said. “We have a social responsibility to care for those people.”
Erdman proposed that the state consider expanding its sales tax to include sales on the internet and revamping the state income tax. He added that he expects his agency and others to make their views known to legislators — but he isn’t sure how effective their efforts may be.
“They’re afraid of doing something that would more fairly distribute the tax burden because it might be too much of a political issue,” Erdman said. “So instead of that, they take aim at people who have no political voice.”
Glenn Koenen, executive director of the Circle of Concern food pantry, said he hopes lawmakers consider the direct, effective benefits of tax credits such as those going to food pantries, which legislative leaders put on the list to go away by 2015.
“Every dollar they give us for tax credits,” he said, “we are getting $2 to help families. We’re very efficient. It’s a win-win situation, and it’s very direct. It’s not like some of the building tax credits, where you have a five or 10-year turnaround and can’t tell whether it’s going to be a success until some time down the road.
“We’re the concrete version of what a tax credit should be. We’re the easy ones.”
Meanwhile, another frequent tax-credit critic — state Sen. Chuck Purgason, R-Caulfield — appeared to be softening his initial concerns about the announced economic-development agreement.
Purgason said he has since been assured that what was announced was “the basic framework of an agreement” that is still in flux.
“I’m going to be the bill’s handler, so it’s very important that I’m on board,” Purgason said. “I will only move a bill that I’m comfortable with…I’m optimistic the final details will come together.”
Purgason said he will support the final version only if it truly encourages economic development, “protect essential state services” and “protects the majority of taxpayers who have to pay the bills for these things.”
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