Mo. senators scaling back airport cargo incentives

Wednesday, September 14, 2011

JEFFERSON CITY, Mo. -- Missouri Senate leaders scaled back a tax credit proposal intended to spur international trade at the St. Louis airport Tuesday, acquiescing to colleagues concerned about pouring hundreds of millions of tax dollars into the construction of warehouses without a firm guarantee it would benefit the state.

Senate President Pro Tem Rob Mayer said his latest version of the legislation overhauling the state's business incentives still could spur job creation, but it also could set up a special session showdown with the House by breaking the outlines of a deal struck earlier this summer between Senate and House leaders.

As originally proposed, the legislation offered up to $60 million in tax credits for companies that handle the logistics of exports and up to $300 million of tax credits for the construction of warehouses and manufacturing facilities near Lambert-St. Louis International Airport. Supporters said the incentives were essential to transforming the airport into a hub for Chinese cargo planes and potentially for other international trade.

But debate on the legislation was delayed last week as some Republicans, including Sen. Jason Crowell, R-Cape Girardeau, threatened to filibuster the bill. Monday evening, Crowell voted in favor of Mayer's revised bill.

"I support the legislation now that it has been changed as I have advocated," Crowell said.

Majority Republicans held a closed-door meeting late Monday where they decided to pare back the incentives associated with the St. Louis airport known as "aerotropolis" tax credits.

The version debuted Tuesday by Mayer keeps the incentives for export handlers but eliminates the $300 million in tax credits earmarked for warehouses and manufacturing facilities built near the airport to handle products shipped into and out of the country. Mayer said those businesses still could apply for state incentives through other, existing state tax credit programs. But they would have to meet standard job-creation thresholds intended to ensure the state gets a positive return on the tax breaks.

Senators further pared back the bill Tuesday by eliminating part of the funding source for the new tax credits.

As originally proposed this summer by Senate and House leaders, the legislation would have repealed a tax credit for low-income elderly and disabled residents who live in rented homes. That move would have saved the state about $58 million annually, which could have been poured into the state budget or the creation of new business incentives. But senators voted 17-16 Tuesday to pass an amendment by Sen. Rob Schaaf, R-St. Joseph, that keeps the tax credit intact for senior citizens and the disabled. All eight of the chamber's Democrats joined Schaaf and eight other Republicans in voting for the amendment.

Crowell did not vote in favor of keeping the circuit breaker for renters.

"I do not believe we should give tax cuts to people that don't pay taxes," he said.

Other potentially revenue-saving measures remain in the bill.

The legislation would set an $80 million annual cap on historic preservation tax credits for large renovation projects and a $10 million annual tax credit cap on smaller projects. Current law sets a $140 million annual cap on historic tax credits for large projects but exempts smaller projects from the cap.

The latest version of the legislation also would set a $110 million cap next year on the state's main tax credit program for the developers of low-income housing, with that cap gradually falling to $70 million by the 2015 fiscal year. A secondary such tax credit program would be entirely phased out. Both of those provisions go further than originally agreed upon this summer by House and Senate leaders.

Also absent from the summer agreement is a Senate provision backed by Nixon that would roll several of the state's existing business programs into a single new program dubbed "Compete Missouri" that would provide incentives for training, hiring and, in some cases, retaining employees instead of moving a business to another state. The new program also would, for the first time, give the Department of Economic Development authority to provide upfront cash to companies similar to what is done in Texas and other states.

Southeast Missourian reporter Melissa Miller contributed to this report.

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