Mo. lawmakers pass $66 million tax-break bill

~ The centerpiece of the legislation is an expansion of the Quality Jobs program.

JEFFERSON CITY, Mo. -- Lawmakers gave final approval Thursday to a measure offering $66 million a year in new tax breaks, sending Gov. Matt Blunt a bill touted as pivotal to the creation of thousands of jobs.

Under the banner of economic development, the bill would expand or create tax credits for businesses, their investors, developers, beef cattle farmers and movie makers. It even would legalize ticket scalping, which advocates contend could bring jobs to Missouri.

The House sent the bill to Blunt by a 125-19 vote, following a 25-7 Senate vote late Wednesday night. The Legislature then adjourned its two-week special session.

Lawmakers also sent Blunt a bill late Wednesday that could help speed up repairs to some of Missouri's worst bridges by waiving some of the state's conventional contractor requirements. The project would award a single, 30-year contract to fix and maintain 802 bridges.

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

To assure the bill did not again balloon, Blunt limited the scope of what lawmakers could consider by issuing an extremely detailed special session proclamation. He described the new measure as a "responsible economic development bill" that he looked forward to signing.

The centerpiece of the legislation is an expansion of the Quality Jobs program, which rewards certain businesses that add jobs paying at least the average county or state wage and covering at least half the employees' health-insurance premiums.

The program, created in 2005, allows those businesses to keep a portion of the income withholding taxes collected for new jobs. Some businesses also can qualify for tax credits, which had been capped statewide at $12 million annually.

State economic development officials say the program has become so popular that the cap is now insufficient. The legislation raises the annual cap to $40 million.

Since the Quality Jobs program began, it has been used by businesses that have added about 17,000 jobs, said Department of Economic Development spokesman Spence Jackson. An additional 7,373 potential new jobs have been on hold by businesses pending legislative approval of the expanded tax credit cap, Jackson said.

House Speaker Rod Jetton provided a personal testimonial. He said a businesswoman from Poplar Bluff called him inquiring if the bill had passed.

"I was like, 'yes.' She goes, 'Hot dog, this is something that's really going to help us a lot,'" said Jetton, R-Marble Hill. "I think you're going to see that all over the state -- people looking at expanding or bringing more jobs to the state, and that's a positive."

The Quality Jobs program enjoyed bipartisan support. But some lawmakers questioned the need for some of the other tax credits in the legislation.

Rep. Belinda Harris complained that the state was expanding its tax breaks, and thus shrinking its revenue, without considering all potential effects.

"This is not the job of state government -- this picking and choosing of which businesses will get these tax credits and putting other businesses at a disadvantage," said Harris, D-Hillsboro, who voted against the bill.

Sen. Jolie Justus, D-Kansas City, labeled it "a special session for special interests."

The bill's most contentious provision would offer $10 million of new tax credits annually, with a maximum of $95 million over time, to developers who buy up large sections of land in impoverished areas.

The measure is backed by developer Paul McKee Jr., who is involved with various business entities that already have amassed hundreds of parcels of land in generally rundown areas of north St. Louis. Entities affiliated with McKee have contributed thousands of dollars to Blunt, Lt. Gov. Peter Kinder and other politicians.

Few disagree with the need to improve north St. Louis. But some lawmakers said the legislation's requirement for large projects makes it difficult for the tax credit to be used in other parts of the state, particularly in rural Missouri or possibly even Kansas City.

Supporters of the land assembly tax credit countered that if it works in St. Louis, it could later be expanded to apply to smaller projects elsewhere.

Other new tax credits would reward those who invest in projects in low-income communities and to farmers for fattening their beef cattle longer in Missouri, instead of shipping them to out-of-state feed lots.

The bill's sponsor, Rep. Ron Richard, R-Joplin, said it was the first significant economic development initiative to pass since the 2005 measure that contained the Quality Jobs program.

"Missouri needs to think differently. We're surrounded by states that have been more aggressive than us during the past few years," Richard said.

The legislation also triples the annual tax credits available to film producers who shoot movies, TV shows or commercials in Missouri. More films also could qualify, because the bill lowers the minimum in-state expenditure from $300,000 to $50,000.

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On the Net:

Legislature: http://www.moga.mo.gov