Blunt signs legislation to spur economy through tax credits

JEFFERSON CITY, Mo. -- Businesses looking to expand in Missouri gained access to tens of millions of dollars of tax credits Tuesday as Gov. Matt Blunt signed into law an economic development bill passed in a special legislative session.

Two parts of the bill took effect immediately, authorizing new tax credits for certain business investors and expanding the Quality Jobs tax breaks for businesses that add jobs with average wages and health benefits.

Other parts of the legislation will take effect later. Tickets to sporting events can legally be sold for more than their face value starting Nov. 28. Expanded tax credits for movie makers kick in Jan. 1. And new tax credits for beef cattle producers will begin in 2009.

When the various pieces are all in place, the legislation will authorize an additional $66 million a year in tax credits.

Blunt called the special session after vetoing a broader bill passed in May that he claimed could have cost up to $200 million annually while providing tax breaks to some questionable causes.

He touted the legislation he ultimately signed as a responsible package that encourages people to innovate, invest their earnings and create additional jobs.

Expanded programs

The most important part, Blunt said, is an expansion of the Quality Jobs tax credits from $12 million a year to $40 million.

State economic development officials say businesses participating in the program have added about 17,000 jobs since the program began in 2005, but the tax credit cap has become insufficient. An additional 7,373 potential new jobs have been on hold by businesses pending legislative approval of the expanded tax credit cap, according to the Department of Economic Development.

"This will result in a nearly immediate increase in family supporting jobs in our state," Blunt said while signing the legislation at his Capitol office.

Missouri's investor tax credit will match one already offered by the federal government for community development firms, banks or organizations that invest in projects in economically distressed areas.

One of its biggest backers has been the St. Louis office of Advantage Capital Partners.

That firm had been allotted $230 million in federal tax credits and had invested about $130 million as of June, about 70 percent of which went toward Missouri projects, said senior managing director Scott Zajac. But unless Missouri provided a matching tax credit, the firm likely would have directed its remaining share of federal-tax-credit-financed investments to projects in other states offering their own matching incentives, he said.

"We can have more economic impact when we take more risk, and we can take more risk when there is a greater incentive," Zajac explained in June, before Blunt vetoed the original bill and called the special session.

Sponsoring Sen. John Griesheimer, R-Washington, described Blunt's veto as a "dark day."

But the trimmed down bill passed during the special session still is "probably the most comprehensive economic development bill in the state of Missouri," Griesheimer said.

Contentious credit

The most contentious provision will create a new $10 million annual tax credit, beginning Jan. 1, for developers who buy up large swaths of land in impoverished areas. It's targeted especially for north St. Louis, where developer Paul McKee Jr. already has amassed hundreds of parcels of land. He also has contributed thousands of dollars to Blunt, Lt. Gov. Peter Kinder and other politicians who have supported his push for the new tax credits.

Blunt on Tuesday called it an innovative program.

"The goal of urban redevelopment must be to make life better for the people already living in the neighborhood," the governor said. "I believe the land assemblage tax credit could do just that by making a significant injection of resources to encourage private investment into areas that have been neglected and impoverished for decades."