This article first appeared in the St. Louis Beacon, Sept. 8, 2011 - The Missouri Senate is adjourning until Monday afternoon so members can study changes that a committee made late Wednesday to an economic development package. The move comes amid signs of trouble for the package and is an effort to get the package back on track.
Senate President Pro Tem Rob Mayer, R-Dexter, said that the state Department of Economic Development has also been asked to provide a fiscal analysis of the measure, and "what the return would be for the state of Missouri."
The presentation would be made to the state Senate on Tuesday, when Mayer said formal debate of the package will get underway.
The package includes $360 million in proposed tax credits to encourage China to locate a cargo hub at Lambert St. Louis International Airport.
Despite Mayer's announcement, critics of the Hub fired a few shots on the floor before leaving. Sen. Rob Schaaf, R-St. Joseph, called the China Hub -- also known as Aerotropolis -- as "the tumor'' that threatens the entire bill.
He contended Mayer and other supporters were attempting legislative "chemotherapy'' to save the provision, but that it may not work.
St. Louis Mayor Francis Slay, a staunch Hub supporter who was in the Capitol today for another bill, said he wasn't sure "how to read'' the Senate's action.
But the mayor added, "I believe that the more people know about the bill, the more likely they will support it."
Our earlier story:
As a bloc of Missouri state senators try to rescue a special session and an economic development package already under fire, tea party activists plan to return today to the state Capitol -- where they held a rally Wednesday -- ;to continue their call for its demise.
" 'No' to China Hub. 'No' to Aerotropolis. 'No' to this monstrosity,'' declared Cindy McGee, chairman of the St. Louis-based Show-Me Patriots, at a late-morning Wednesday rally in the Capitol rotunda. "It seems that too many still don't hear us."
Upstairs, senators plan to return to work this morning on possible compromise language to the 350-page economic bill touted as a done deal in July -- but now possibly endangered.
That bill includes a variety of tax credit proposals geared toward economic development, including $360 million for an effort to persuade China to locate a cargo hub at the underused Lambert St. Louis International Airport.
Late Wednesday, a Senate economic panel voted 7-2 to approve an amended version of the package, after hearing from dozens of witnesses on both side of the issue.
The committee voted 8-1 to approve another bill that just contains the proposed tax break for the Missouri Science and Innovation Reinvestment Act, known as MOSIRA, to encourage the growth of science-related businesses, including those involving the life sciences. MOSIRA also is in the broader bill.
St. Louis Mayor Francis Slay was among a cadre of supporters -- including officials with a variety of business groups, as well as the state AFL-CIO -- who portrayed the economic package as an ambitious effort to kick-start job creation around the state.
Slay emphasized that the China Hub proposal, also known as Aerotropolis, wasn't a sure thing. The Chinese government may ultimately pick another U.S. airport, he said. "But if we sit here and do nothing, I promise you those opportunities will pass us by."
If the $360 million in tax credits help land the deal, said Slay, the result would produce thousands of permanent jobs and "reinvent Missouri and St. Louis on the international stage."
Most of the credits would be aimed at developers who build or improve warehouses and other structures needed near the airport of the Chinese choose Lambert. The Senate committee's late-night changes include giving the state Department of Economic Development total say over which developers get the credit. Earlier versions gave the power to Slay, St. Louis County Executive Charlie Dooley and a special commission.
Besides the China Hub and MOSIRA, other parts of the package include:
- Approving special tax breaks to encourage the development and construction of high-tech data centers;
- Enacting the proposed "Compete Missouri Initiative,'' that includes tax breaks and incentives to attract and retain businesses and improve the state's job-training programs.
- Authorizing tax breaks to attract amateur sporting events to Missouri.
- Imposing "sunsets'' and restrictions on a variety of state tax credit programs.
- Granting "amnesty" to errant taxpayers who owe unpaid back taxes. They won't face penalties or interest if they pay their unpaid state taxes in full between August 1, 2012 and September 30, 2012.
Panel Seeks to Preserve 'Circuit Breaker'
Ron Calzone, director of a tea-party aligned group called "Missouri First," helped lead off a parade of conservative opponents who told the Senate panel at the packed hearing -- which lasted more than three hours -- that all tax credits needed to go. Calzone declared that such breaks were unconstitutional because they represented preferential treatment.
But joining the tea party critics were representatives of social-service and Catholic groups who wanted to preserve tax credits for low-income and the elderly. They particularly opposed the provision of the package that would eliminate a tax break, known as the ''circuit breaker,'' for low-income elderly and disabled renters.
The tax break costs the state about $52 million a year, with small checks sent annually to 100,000 recipients.
Kevin Klingerman, director of housing for Cardinal Ritter Senior Services in St. Louis, almost broke into tears as he told of the dire financial straits facing some elderly. "Preservation of personal assets in old age is tenuous,'' Klingerman said, his voice breaking with emotion.
The annual circuit-breaker check, he added, is the only time some can "buy a pair of shoes."
Later, the Senate committee voted to approve a carefully worded amendment to phase out the tax break over four years, while also allowing the General Assembly to appropriate annually the dropped amount from the regular budget -- meaning that recipients may not see a cut in their benefit.
State Sen. Ryan McKenna, D-Crystal City, said the amendment might be enough to persuade him to back the overall bill. McKenna, a member of the Senate economic panel, said he believed that the elderly were a powerful enough voting bloc that legislators would make a point of appropriating the necessary aid from the regular budget. "If there is an all-out elimination of the circuit breaker, I cannot support the bill,'' McKenna said.
But Sen. Brian Nieves, R-Washington, joined fellow committee member LuAnn Ridgeway, R-Smithville, in voting against the measure. In interviews, each cited the China Hub as among the reasons for their opposition.
Nieves observed that he has become less enamored with state tax credits, in general, but added that he took issue with many of the economic bill's provisions. "That bill is a whole lot of straws that broke the camel's back,'' Nieves said.
The committee's chairman -- state Sen. Eric Schmitt, R-Glendale -- is also among the China Hub's biggest boosters. Schmitt said afterwards that he remained optimistic. "We'll just keep working together,'' Schmitt said.
Dan Mehan, chief executive of the Missouri Chamber of Commerce and Industry, had stayed throughout the hearing and vote -- and visibly displayed relief afterwards. "Thank goodness we took the first step to move it down the road,'' he said.
Original 'deal' Broke Down Early
Plans had called for the General Assembly to pass an agreed-on economic development package and tackle a handful of other specified issues, during a special session that legislators hope will last no more than a few weeks.
State Senate President Pro Tem Rob Mayer, R-Dexter, introduced a bill late Tuesday patterned after the original package, after a mini-filibuster was waged for a couple hours by a longstanding critic, state Sen. Jason Crowell, R-Cape Girardeau. Crowell's tea party admirers have a set up a laudatory Twitter account on his behalf, with the moniker, "Crowell4Gov." (The account includes a disclaimer that Crowell had no role in it.)
But Mayer and other backers of the economic package ran into a less-expected roadblock when state Sen. Chuck Purgason, R-Caulfield -- who initially had been expected to handle the agreed-on package -- introduced a dramatically different economic development bill.
Purgason said in an interview that his bill would include $60 million for the portion of the China Hub deal aimed at assisting freight forwarders, firms that handle the storage and transportation of freight shipments. The project's other $300 million in proposed tax credits, aimed at infrastructure and warehouses, would be shifted to the state's Quality Jobs program, which rewards companies that create new jobs with benefits.
Purgason contended that it was fairer that most of the China Hub project compete with other Quality Jobs contenders.
The guts of Purgason's bill, however, would phase out all state tax credits within seven years, unless the General Assembly decides to reauthorize them. The credits would compete alongside other state aid programs, such as those benefiting public education, the senator said.
The initial six-year part of his plan would pare down the major tax credit programs for low-income housing and historic preservation to $50 million a year before they would face demise. The two programs, particularly popular in urban areas, recently had used -- combined -- roughly $300 million a year in tax credits.
Purgason's prime contention is that the current economic development package "sends $360 million to St. Louis." He also aired his own concerns about the elimination of the "circuit breaker'' tax credit.
St. Louis backers of the China Hub have said it's unfair to link Aerotropolis to the circuit-breaker cut, which is among a number of existing tax credit programs that would take a hit under the initial economic development proposal.
Indeed, at Wednesday night's hearing, Mayer read the lengthy list of tax credit programs eliminated or trimmed under the package.
Another tax credit opponent -- state Sen. Jim Lembke, R-Lemay -- said he plans to vote against the economic development package. But he won't filibuster if it contains enough changes in the state's existing tax credit setup that Lembke sees it overall as "a win for taxpayers."
Lembke had shown up at the tea party rally, but only to listen. Several participants collared him afterward to remind Lembke that he's up for re-election in 2012.
In fact, that was the message of many of the rally's speakers. They warned that legislators who had been backed by tea party supporters last fall will find themselves voted out of office in 2012 by the same tea party crowd if they depart from conservative principles.
Those principles, McGee and others said, include opposition to state tax credits -- new or old. "Tax credits are nothing more than government's picking winners and losers,'' she said.
The audience cheered as Chuck MacNab, head of the St. Charles-based K & N Patriots, declared: "Let's just say 'No' to subsidies for economic development!"
The activists had driven into Jefferson City in an entourage that included a half-dozen vehicles adorned with the yellow "Don't Tread on Me" flags and "No China Hub'' painted on windows and signs.
As they did Wednesday, the vehicles are expected to circle the Capitol again today.
