Analysis: Boeing bid could affect Missouri regardless of outcome

JEFFERSON CITY, Mo. -- Like passengers flying standby during the Christmas rush, Missouri politicians now are in a wait-and-see mode as to whether they will receive a prized seat or be bumped by others in a multistate competition to assemble a new Boeing airplane.

Yet even if Missouri loses, the effort to lure Boeing could have implications for the state's future economy, finances and labor policies.

Here's a look at three of those potential effects:

Business ripple

Some lawmakers insist Missouri made a positive impression on national business leaders merely by trying to have Boeing locate its 777X assembly plant in the St. Louis area.

Lawmakers called into a special session by Gov. Jay Nixon worked quickly to give bipartisan approval to tax incentives that could be worth up to $1.7 billion over more than two decades, depending on the number of new jobs Boeing would bring. St. Louis County also approved an incentive package, which could raise that total to about $3.5 billion.

Missouri may lack some things that Boeing would prefer, such as a seaport for shipping large airplane components. But the size and speed of Missouri's offer shows it's serious about attracting businesses, say state officials.

"It shows that we're eager, we're willing and we can step up to the plate," said House Economic Development Committee Chairwoman Anne Zerr, R-St. Charles.

"It shows the wider business community that we can come together and we can be kind of nimble," said Rep. Tom Flanigan, R-Carthage, who is vice chairman of the House Budget Committee. "That shows some people that, 'Hey, maybe Missouri is a place we need to look.' And that could have a ripple effect that you don't know about until later."

Tax credits

To secure passage of the Boeing incentives, Nixon met personally with several reluctant Republican senators who had suggested they might hold up a vote on the bill.

The senators wanted to offset the new Boeing tax breaks with reductions to Missouri's existing tax credits, which waive more than $500 million annually in would-be revenue. Those lawmakers have been trying unsuccessfully for years to pare back tax credits for the developers of low-income housing and historic buildings, which together accounted for about 43 percent of all tax credits redeemed last year.

The senators agreed to allow a vote on the Boeing incentives, and Nixon agreed to push more aggressively for a tax credit overhaul.

The first fruits of that discussion already are evident. Within hours after the Legislature gave final approval to the Boeing incentives, Nixon's staff asked the Missouri Housing Development Commission to postpone a vote on millions of dollars of tax credits for housing developers. The commission complied.

Even if the Boeing bid fails, "we got a commitment from the governor to do everything he can" for a tax credit overhaul in 2014, said Sen. John Lamping, R-St. Louis.

"We're going to try to coordinate with the governor's office on actual legislation that both we and his group can sign off on ... and propose that legislation early in the session," Lamping added. "That's kind of our next step."

Right-to-work

House Speaker Tim Jones, who supported the Boeing incentives, could gain a significant boost for his legislative agenda if Boeing bypasses both Missouri and its traditional home in the Seattle area in favor of a state with weaker union laws.

Jones' agenda for 2014 includes another attempt at a broad-based income tax cut -- after Nixon vetoed such a bill this year -- and a more aggressive push to make Missouri a right-to-work state, where union fees cannot be a condition of employment.

Several of the states competing for the Boeing assembly plant are right-to-work states, such as South Carolina, Alabama, Utah, Texas and Kansas. If Boeing picks any of those states for its new assembly plant, it will give Jones an added argument to make to colleagues who thus far have been hesitant to bring right-to-work bills to a vote in the Missouri Legislature.

"If we are not chosen, we will have to look very carefully at what the state or states put forward that were chosen," said Jones, R-Eureka. "What are their policies in general on taxation? Labor issues? Regulatory issues? We'll have to keep those in mind as we move forward in the 2014 session."

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David A. Lieb has covered state government and politics for The Associated Press since 1995. Follow him at http://twitter.com/DavidALieb