KC Lawmaker Raising ‘Aerotroplis’ Questions, $360 Million on the Line
September 12, 2011

A major piece of the Missouri Legislature’s special session is taking hit. And more may be coming. Especially from a Kansas City area State Senator, Luanne Ridgeway

The bill is the plan to offer $360 million in tax credits for a foreign trade air cargo hub at St. Louis’ Lambert Field. It is often called the, “Aerotropolis” tax credit plan.

Missourinet reports Ridgeway believes the bill has a second agenda, to manage the debt of an underutilized airport (Lambert Field).

St. Louis Mayor Francis Slay’s staff told Ridgeway that is not the case. The project would create jobs for Missouri and establish a base for increase trade with China coming directly into Missouri.

Ridgeway is threatening to slow the bill down on the Senate floor by requiring the entire text of the bill be read aloud to the Senate.

Monday afternoon, Missourinet reports the state’s Economic Development Department will present a report on the plan to state senators.

Friday, in a letter to Maryville State Senator Brad Lager (R Maryville), the Economic Development Department estimated a $10.2 million dollars state investment in the ‘Aerotroplis’ 400,000 sq foot warehouse project would directly created 215 new jobs.

The machinery and manufacturing element would produce 75 new jobs off an additional state investment of nearly 5 million dollars.

Copies of that letter also went to House and Senate leaders, including House Speaker Steve Tilley; Senate Pro Tem Rob Mayer; House Minority Leader Mike Talboy of Kansas City and Senate Minority leader Victor Callahan of Independence.

(Missourinet via johncombest contributed to this report)

Special Session Jobs Deal Has Its Skeptics
July 22, 2011

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.


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.


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.”

Nixon Sets Special Session on Jobs for September
July 21, 2011

Missouri Governor Jay Nixon has says the special session on jobs and trade will be in September. He did not mention a date but probably in connection with the legislature’s planned veto session, which is scheduled for September 14.

In Kansas City, Nixon says the session was produced by hard work from his office and legislative leaders.

Republican House Speaker Steve Tilley and Senate leader Rob Mayer announced Wednesday they had developed a compromise jobs plan.

They will meet with Nixon next week to set up the special session.

Meanwhile, the Missouri Republican party accused Nixon of taking credit for their idea. When asked about it in Kansas City,  Nixon says they have been working on this for a long time.

The main thrust of the session will be increasing Missouri’s ability to retain jobs. Kansas City, in particular, feels it is losing jobs to Kansas because they have a better set of incentives to offer companies.

There is also a plan for a major freight hub at Lambert Airport in St. Louis in an effort to development a trade arrangement between the state and China.

“In Kansas City”, Nixon said,” we need the tools to compete with other states to make sure good paying jobs come to Missouri and stay in Missouri”.

He also says there will be some up-front money available to try to keep companies from cross the state line.

Kansas economic development specialist have been adept at offering companies up-front money in return for the move.

The money or a series of economic proposals will come from capping some state tax credits. Legislative sources expect the state can save $1.5 billion over 10 years with limits on the tax credits.Some of the tax credits  likely to be limited are creduts for historic preservation and some low-income programs.

Another porgram to be soncisdering in the special session may also bring in some monwey for the state.  The Missouri Science  and innovation Reinvestment Act, known as MOSIRA, will encourage  high tech and life science businesses to locate in Missouri.

Nixon said in his speech the state’s plan is to  capture ” a small percentage  of tax revenue generated by employees at new and existing life science  companies”, then dedicate that to recurintg similar firms. That is also been a project Kansas City, inparticular, has coveted.  

Nixon also warned the state will have to spend “hundreds of millions of dollars” recovering the natural disaster that have struck the state this year.

He listed a total of almost $220 million dollars in disaster aid  to rebuild after the  massive, deadly Joplin tornado in May.

He refused to put a specific number on the eventual total cost to the state from all of the blizzards, twisters and floods.

Nixon Calls Special Session After GOP Leaders Strike Jobs Deal
July 20, 2011

Missouri Governor Jay Nixon has called for a special session of the legislature, just hours after Republican leaders of the House And Senate announce a compromise jobs package. It is a jobs retention plan that could have a major impact in Kansas City.
“I think it’s is fantastic” said City Ciuncil man John Sharp.
The broad details call for a major job rendering bill, money to encourage data centers in Kansas City and other parts of the state, and the development of a life science program similar to the Kansas Bioscience Authority.
“By working together in a bi-partisan way, we’ve taken another important step toward passing a major job-creation package in a fiscally responsible manner.”, Nixon said in a statement.
House speaker Steve Tilley says the compromise came about as the Hiuse and Senate leaders struck a deal on how to pay for the plan.
Part of the money will come through and estimates $1.5 billion dollars over 10 years by limiting some tax credits XOR low income programs and historic preservation tax credits.
Gov Nixon is expected to elaborate on his view of the deal with a previously scheduled ” major policy address” according to his office. That speech will be in Kansas City Thursday.