Republicans stick with Blunt's plan for economic development

Friday, August 24, 2007

JEFFERSON CITY, Mo. -- House Republicans deferred to Gov. Matt Blunt on Thursday, endorsing the economic development package he outlined while refusing to even allow discussion on various Democratic efforts to tinker with its details.

Democrats decried majority Republicans for using heavy-handed tactics, claiming lawmakers were ceding their constitutional power to make laws to the executive branch and reducing the special legislative session to a sham.

The House passed an economic development bill creating up to $66 million in new tax credits for businesses and developers and legalizing ticket scalping. Many Democrats ultimately joined in the 120-29 vote sending the bill to the Senate for consideration next week.

Lawmakers are convened in special session at the call of Blunt, who last month vetoed a broader economic development bill that he claimed could have cost up to $200 million while awarding tax breaks to some questionable causes.

The slimmed down bill expands tax credits for businesses that add jobs with at least average wages and health benefits, those that locate in economically distressed areas and movie makers who shoot scenes in Missouri. It also creates news tax credits for cattle ranchers, entrepreneurial investors and redevelopers who buy up large swaths of land in impoverished areas.

The constitution gives governors authority to set the agenda for special sessions, requiring them to "state specifically each matter on which action is deemed necessary." Blunt did so in great detail.

For example, his special session proclamation stipulated that the new tax credit for assembling land should apply to projects of at least 75 acres, of which the developer acquired 50 acres, and where 80 percent of the total area is impoverished. Blunt's call further specifies that the developer seeking the tax credits can do no more than 75 percent of the work, with other developers doing the rest. And it limits the tax credits to $10 million annually, or $95 million over time.

When Democrats tried to change some of those details, Republicans ruled the amendments out of order and barred debate. The constitution says lawmakers can act only on subjects "specially designated" in the governor's special session proclamation.

Rep. Leonard "Jonas" Hughes, D-Kansas City, had sought to expand the land assemblage tax credits to more developers by lowering the minimum acreage to 20 instead of 75.

Rep. Jeanette Mott Oxford, D-St. Louis, had sought to cap the total acreage eligibility at 30 acres, with a minimum requirement that a developer had acquired 2 of those acres. Her amendment also would have required tax credit applicants to host at least three public meetings in the project area to review their plans, among other things.

As Republican House leaders ruled those amendments went beyond Blunt's proclamation, House Assistant Minority Leader Paul LeVota questioned whether Blunt's detailed proclamation itself was unconstitutional by infringing on legislative prerogative.

"This is a joke," declared LeVota, D-Independence.

Added Oxford: "The governor is dictating what we must legislate."

Jessica Robinson, a spokeswoman for Blunt, said the governor had simply fulfilled his constitutional requirement to "state specifically" each matter for lawmakers to consider. Blunt was pleased with the bill's passage, she said.

Although it might have appeared to onlookers that Republicans were just following Blunt's desires, legislative leaders had a significant role in shaping the terms of the governor's special session call, said House Speaker Rod Jetton, R-Marble Hill.

"I guess you could say we ceded some power away," Jetton said, "but when you're in a special session and the governor drafts a very narrow call, it does somewhat limit the Legislature's ability to delve into other areas."

Republican House leaders allowed debate and votes on just two of the 11 proposed Democratic amendments.

The House defeated 86-62 an amendment that would have removed the land assemblage tax credit from the bill. It defeated 99-51 an amendment that would have stricken everything but three of the bill's provisions, two of which expand existing tax credits to businesses.

Bill sponsor Rep. Ron Richard defended the land assemblage tax credit against assertions that it would primarily benefit St. Louis area developer Paul McKee, who has amassed hundreds of parcels of land, hired lobbyists and contributed money to Blunt, Lt. Gov. Peter Kinder and other Republican and Democratic politicians.

Richard praised McKee for backing a creative proposal and argued that he might not even have enough land to qualify for the tax credits.

"No one in 30 years has had the ability to put tracts together for development. This is going to be a tool for new direction," said Richard, R-Joplin, chairman of the House Job Creation and Economic Development Committee. "This is going to work, and it's going to work well."

Other lawmakers touted additional parts of the bill.

Rep. David Pearce, R-Warrensburg, praised an expansion of the tax credits available to Missouri film makers from the current $1.5 million to $4.5 million annually. He said 36 other states offer similar incentives.

"Basically, if we don't provide tax credits for producers, these films will not be made in the state of Missouri," Pearce said.

Rep. Charlie Schlottach, R-Owensville, praised a proposal offering up to $3 million annually in tax credits to beef producers. Missouri is No. 2 nationally behind Texas in beef cows, he said, and the tax credits could create jobs by enticing farmers to keep their cattle in Missouri longer instead of sending them to out-of-state feed lots.

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