Mo. senators pass $66 million tax break package

Associated Press Writer

JEFFERSON CITY, Mo. (AP) -- Senators passed a $66 million annual package of tax breaks late Wednesday after turning back an attempt to strip out a tax incentive for large-scale redevelopments in rundown parts of St. Louis.

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

The Senate's 25-7 vote sends the bill back to the House, which had passed a slightly different version last week by a 120-29 vote. The House was expected to vote Thursday to send the bill on to Gov. Matt Blunt, who had called lawmakers into special session.

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

The Senate passed the bridge legislation 32-0 late Wednesday without any debate, following a 135-14 House vote last week.

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

Senators debated the economic development legislation for more than 10 hours before finally approving it as midnight approached.

"There's an awful lot of good programs here," sponsoring Sen. John Griesheimer, R-Washington, told his colleagues shortly before the vote. "The jobs that this bill will bring to the state of Missouri, and your district, is tremendous."

The centerpiece of the legislation would more than triple the annual tax credits available for certain businesses that add jobs providing health insurance and wages at least as high as the local or state average.

The Quality Jobs program, which also allows those businesses to keep a portion of the income withholding taxes collected for new jobs, had a $12 million annual tax credit cap when created two years ago.

State economic development officials say the program has become so popular that the cap is now insufficient. The legislation would allow the program to offer up to $40 million a year in tax credits.

The Quality Jobs expansion had broad support from both majority Republicans and minority party Democrats. But when one Democratic senator proposed to raise the tax credit cap even further, to $50 million annually, Griesheimer warned that would be "fiscally irresponsible" because of concerns of a tight state budget in the 2010 fiscal year. Republicans then defeated the amendment.

Republican senators also upheld a ruling by Senate President Pro Tem Michael Gibbons, R-Kirkwood, that barred consideration of a Democratic amendment penalizing any developer, contractor or subcontractor for employing illegal immigrants on a project receiving tax credits under the bill.

Gibbons said the immigration amendment went beyond the scope of Blunt's special session proclamation by dealing with contractors who weren't direct recipients of the tax credits.

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 north St. Louis. Some of those lots are vacant or contain boarded-up buildings.

Entities affiliated with McKee have contributed thousands of dollars to Blunt, Lt. Gov. Peter Kinder and other Republican and Democratic politicians.

Few disagree with the need to improve north St. Louis. But some senators 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 potentially even in Kansas City.

Senators voted 25-8 against an amendment that would have stripped the land assembly tax credit from an economic development bill. They also defeated an amendment that would have opened the tax credits up to smaller developments by removing a requirement that the project area encompass at least 75 acres.

It could be difficult to amass that much land in a small town, said Sen. Wes Shoemyer, D-Clarence.

"We need the opportunity to have redevelopment in rural Missouri, much like the folks in St. Louis," he said.

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

"When you have an idea like that, you give it a shot, especially when it's going to take a bombed-out area, like what we're talking about, and totally revitalize that area," Griesheimer said.

Among those voting to remove the land assembly tax credit from the legislation was Sen. Maida Coleman, D-St. Louis, whose district includes much of the area expected to qualify for the tax credit.

"My issue with this legislation is that a lot of people are talking about something they know nothing about," Coleman said. "If this wasn't about people getting their pocketbooks filled, if this wasn't about people getting huge campaign donations, how interested in north St. Louis would all these people be?"