Tax credit giveaway for football team spurs debate

Over the past six months, Missouri's budget picture has soured as quickly as the national economy. From a much-ballyhooed surplus of $833 million in July, the state now faces a projected deficit for the current year of $342 million.

State colleges and universities are being asked to prepare for possible budget cuts and other agencies can be expected to do the same.

As a result, the actions of state boards that issue tax credits to promote economic development is coming under scrutiny, with the debate pitting Sen. Jason Crowell, R-Cape Girardeau, against his predecessor, Lt. Gov. Peter Kinder.

The Missouri Development Finance Board, an 11-member body chaired by Kinder, on Tuesday authorized $25 million in state tax credits that will in part benefit the Kansas City Chiefs. To obtain the credits, the Chiefs management has agreed to contribute $10 million toward construction of an indoor training facility at Missouri Western State University in St. Joseph. The credits, authorized for the Jackson County Sports Authority, also cover promises to spend additional amounts to upgrade Arrowhead Stadium and make infrastructure upgrades at the Truman Sports Complex where the stadium is. The Chiefs would move their training camp to Missouri from Wisconsin.

The board vote — which was unanimous — isn't the last word on the project. It must still be approved by the directors of the state Department of Economic Development and Department of Revenue as well as the Commissioner of Administration.

In spite of that potential check, Crowell wants to limit the board's power to approve big projects without legislative approval. He filed a bill to curb the power in anticipation of next month's legislative session. "I have cast very difficult and very gut-wrenching, heart-wrenching votes to balance the budget in Jefferson City," Crowell said. "I see us confronting a $342 million shortfall in this fiscal year and am told that it could be as high as a $1.1 billion shortfall in the next fiscal year. I am kind of wondering whether $25 million for an indoor practice field and parking enhancements is the best utilization of limited resources."

The tax credit program used by the board for the Chiefs' project provides a 50 percent credit against state taxes for contributions to the board to help it pay for public improvements, with an annual limit of $10 million statewide. Larger amounts are allowed, but only with the approval of the three cabinet officers.

Job creation

With the economy in recession, now is not the time to step back from job-creating programs, Kinder said to defend the action.

"I am for any projects that will put Missourians to work as soon as possible," Kinder said. "On the stadium rebuild, there will be 1,500 union tradesmen and women working at prevailing wage union jobs with benefits. There will be that many more put to work on the St. Joseph portion. That is by itself a stimulative effect on a down economy at this time."

Crowell was joined in his criticism of the help for the Chiefs by Sen. Wes Shoemyer, D-Clarence, who aimed his criticism squarely at Kinder as leader of the board. "We want to rein these folks in," he said. "They are out of control. They do not see all the other budget constraints. They have one project in front of them and they say, 'this will make us money.' Maybe in 20 years, but we've got budget constraints next year to get through."

Since April 2005, the finance board has authorized $153.1 million in tax credits for 34 projects, including $50 million to help the pay for other improvements at the sports complex. The $20.8 million in credits used for Kansas City sports complex improvements is more than half of the $38.7 million of the authorized credits that have actually been issued.

The training facility at Missouri Western will have a substantial benefit to the university, Kinder said. The Chiefs will use it for a few weeks each year during training camp, then it will be available for the students and athletes at Missouri Western, he said.

$13.45 million price tag

The cost is $13.45 million. The Chiefs will contribute $10 million, and the school has pledged to raise the rest. The Chiefs would receive a $5 million tax credit.

According to the economic analysis of the project, the spending to build the facility will have a $31 million state economic impact and result in $470,000 of state revenue. Tourism tied to the training camp would generate $1 million in annual economic impact and $10,000 a year in state revenue, the report said.

Neither Crowell nor Shoemyer has shied away from voting for tax credit programs. Crowell is a booster of the Quality Jobs program, which provides new employers credits for jobs meeting income and benefit guidelines. Shoemyer said he supported a major tax credit bill designed to draw jet manufacturer Bombardier to Kansas City.

But the move in favor of the Chiefs is a slap at the legislature, Crowell said, which would never approve the credits during a downturn. "I am making a continuation of a call to reform these types of processes that has occurred, particularly within the Blunt administration," he said. "Things that would not get legislative support are bypassed through these boards."

Kinder, Crowell said, does not have to vote on the tight budgets the board's actions are making tighter.

In response, Kinder said he's not ignoring the state's fiscal condition. The credits stimulate the economy and help boost other sources of revenue, he said. And he noted that he led the state Senate during the rocky budget years from 2001 to 2005, when state revenues crashed and education budgets were slashed.

Kinder isn't the only person from Cape Girardeau on the finance board. John Mehner, president and chief executive officer of the Cape Girardeau Area Chamber of Commerce, is also a member, and he said he backed the tax credits based on the overall economic impact. He was not lobbied, Mehner said, and he would not back it if it seemed like a sweetheart deal with no justification.

"When there is a greater return than what the investment is, then I think you have to look at that deal," Mehner said.