Lawmakers pass economic development bill

Saturday, May 16, 2009

JEFFERSON CITY, Mo. -- Breaking a stalemate on their last day, Missouri lawmakers sent Gov. Jay Nixon a compromise bill Friday expanding some business incentives while reining in others.

Passage of the economic development bill allowed the Democratic governor and Republican-led legislature to claim success on their No. 1 priority for the 2009 session. But financial strains or partisan tensions led to the defeat of several other Nixon priorities -- namely, the proposed expansions of college scholarships, government health care for low-income parents and private insurance for autistic children.

Nixon said he had no immediate plans to call lawmakers back for a special session, but he put autism insurance and health care on a short list of subjects worth deliberating.

"The number one thing that we needed to get done, which was a broad comprehensive jobs bill ... was accomplished," Nixon told reporters at a post-session news conference.

In a sense, the legislative session was dominated by the economic recession, which has pushed Missouri's unemployment rate up to 8.7 percent and caused a decline in state tax revenues.

Besides wrangling over the jobs bill, lawmakers also struggled with how to spend Missouri's $4.5 billion share of federal economic stimulus money. They used part of the federal money to prop up Missouri's $23 billion operating budget, saved a portion for the future and earmarked several hundred million for special projects around the state.

The final day of the 2009 session began with the Senate's 26-8 vote for the economic development legislation. It was capped when the House gave the bill final approval by a 153-2 vote.

The House and Senate each adjourned about 5:50 p.m. Friday -- 10 minutes before their constitutionally required quitting time.

"At least we can all go home and say we've done the best that we can to get people back to work and attract new jobs and industries to the state," said Sen. John Griesheimer, R-Washington, one of sponsors of the economic development bill.

The legislation would expand several popular tax credits, including the Quality Jobs program that applies to employers who add jobs with at least average wages and health benefits. The bill would raise the cap on Quality Jobs tax credits to $80 million from the current $60 million, giving state economic development officials greater flexibility to target businesses.

By contrast, the bill would impose Missouri's first-ever cap on a program that provides tax credits equal to 25 percent of the cost of redeveloping historic buildings. The renovation program currently functions as an entitlement for those who qualify. Through the first three-quarters of Missouri's 2009 fiscal year, the state had redeemed more than $157 million of such tax credits.

Some senators contend the historic tax credits are busting the state's budget. Others counter that they are revitalizing neighborhoods and downtowns and spurring economic activity.

The legislation would limit the state to approving $140 million annually in historic preservation tax credits for large projects. Renovations costing less than $1.1 million would not be subject to the cap -- an exception insisted upon by the program's advocates.

The bill also would increase eligibility for state job-training incentives and would eliminate Missouri's corporate franchise tax for about three-quarters of the roughly 20,000 businesses now charged it. Nixon said the "targeted tax reform" would amount to a $14.5 million tax cut for small businesses.

In his State of the State address in January, Nixon had called upon lawmakers to pass a jobs bill by their mid-March break. The House acted quickly, but the Senate did not. The final product came after several on-again, off-again Senate filibusters that culminated in a late Thursday night negotiation session.

"It's disappointing that basically we used the entire session to pass one economic development bill -- a good economic development bill, part of the governor's package, but it took us all session to do that," said House Minority Leader Paul LeVota, D-Independence.

On their final day, lawmakers passed a bill taking advantage of federal stimulus money to provide unemployed Missourians up to 20 weeks of additional jobless benefits. They also passed a wide-ranging crime bill banning text messaging while driving and beer bongs on rivers and imposing new penalties on sex offenders and the owners of dangerous dogs.

Divisions within the Legislature's anti-abortion majority led to demise of a bill that would have expanded Missouri's informed-consent requirements for abortion, even though each chamber had passed its own version of the bill.

After intense lobbying efforts and costly public relations campaigns, opponents prevailed against legislation that could have helped utility AmerenUE build a second nuclear reactor by charging customers for financing costs while the construction is in progress.

Senators made a last-ditch effort to expand government-subsidized health coverage to about 35,000 low-income parents by relying on $147 million from the federal government and hospitals.

But House Republicans, who defeated similar proposals earlier in the session, refused to take it up for debate Friday. House Republicans have repeatedly denounced the proposal as welfare.

"I don't think it ever had a chance," said Rep. Doug Ervin, R-Kearney.

Despite the failure of the health care bill, House Speaker Ron Richard, R-Joplin, declared the session successful and said that people "weren't paying attention" if they thought significant bills weren't approved.

Statistics provided by the Missouri Senate show lawmakers in the two chambers introduced 1,835 bills and constitutional amendments and passed 164 of them -- a 9 percent approval rate.

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