This article first appeared in the St. Louis Beacon, Sept. 14, 2011 - The Missouri Senate this morning voted 26-8 to give final approval to a broad-based economic development bill that also drastically shrank -- by $300 million -- a $360 million tax-incentive plan aimed at fostering a China hub at Lambert-St. Louis International Airport.
The bill now goes to the state House, where Speaker Steve Tilley said in an interview this morning that some hub money might be restored. The back-and-forth raised the likelihood that the debate may carry over into next week.
The plan, frequently called "Aerotropolis," is aimed at bringing international cargo to St. Louis' underused airport. Part of the plan included $60 million worth of tax credits as an incentive for freight-forwarders to send cargo to St. Louis' airport. The other $300 million of tax credits, the ones the Senate excised, were aimed at spurring development of facilities around the airport.
This afternoon, the Senate voted 30-4 to pass a separate bill authorizing tax breaks for MOSIRA, the science and technology program that also is part of the broader economic development bill.
Because of what he viewed as "an erosion of support for Aerotropolis," Senate President Pro Tem Rob Mayer, R-Dexter, had told reporters on Tuesday morning that he would present a substitute economic development bill to cut out the warehouse portion of the plan. He said those facilities could receive incentives through other aspects of the bill, including one called "Compete Missouri" that combines six existing programs.
"Obviously it will be a disappointment to some of the proponents of Aerotropolis," said Mayer, who is handling the sprawling economic development bill. "But we're going forward with the freight-forwarder piece and the opportunity to implement a segment of the program."
After a debate that went on into the early evening, the Senate initially passed Mayer's bill Tuesday by a voice vote, which in addition to the China hub incentives included expansion and contraction of various tax credit programs. Unexpectedly, the Senate also narrowly voted not to change a property tax credit for elderly and disabled renters. Previously, some Republican leaders proposed removing the tax credit program for renters.
This morning, some of the same debate continued before the Senate took its final vote.
The China hub incentives sparked intense support and opposition throughout the political spectrum. Some -- such as St. Louis Mayor Francis Slay, a Democrat; Sen. Eric Schmitt, R-Glendale, and Tilley, R-Perryville -- painted the proposal as a chance to revitalize the St. Louis area by jumpstarting new sources of importing and exporting.
Tilley said this morning he hasn't had a chance to read through the Senate's version of the economic development bill. He said expects to visit with the Senate leadership within the next 24 hours.
"It clearly wasn't the deal that we agreed upon," Tilley said.
Tilley said it was possible that the House could overrule the Senate and put Aerotropolis back to its original iteration. "We also said that in good faith we'd work with the Senate, and if there's changes that they made that we can agree with, we'd certainly incorporate those into our bill," Tilley said. "And if there are changes we are not comfortable with, we'll probably stick to the deal."
But opponents, including conservative Republicans as well as some Democrats, balked at doling out large amounts of tax credits in a time of economic uncertainty. That sentiment was especially prevalent Monday night when some senators, such as Sen. Jason Crowell, R-Cape Girardeau, questioned whether the state could recoup tax credits if job creation doesn't occur. A notable critic of the hub proposal and the entire special session, Crowell said assurances weren't included in the legislation.
On Tuesday, Crowell told reporters there's still more "education" and "process" to unfold, adding that the Missouri House would have to take a look at the overall legislation.
"At the end of the day, the one thing that's abundantly clear is there is no deal," Crowell said. "So now we're trying to see if there's an ability to reach consensus on this legislation."
Gov. Jay Nixon, who came around to supporting the China hub after initial skepticism, said he was heartened by the Senate's serious consideration of the issue. He also said there were existing incentives to help build "infrastructure" around the airport.
Asked whether he supported the bill without $300 million for facilities, Nixon said, "Let's see what they put on the floor."
"It's a work in progress," Nixon said. "We feel that if you look at this that it's important to have the freight-forwarding piece in it so we can prime this up. And there are methods through [other parts of Mayer's bill] to help infrastructure that I think ... can be used to assist in this process."
Nixon later released a statement commending the Senate for initially passing the bill.
"These bipartisan, job-creating bills provide targeted tools to continue to grow our economy and invest in the industries of the future," Nixon said. "In addition to helping get Missourians back to work, these bills will maintain strict fiscal discipline, protect Missouri's spotless AAA credit rating, and make sure that we have the resources necessary to protect vital programs and services."
After testifying for a bill Tuesday morning that would eliminate state control of St. Louis' police department, Slay indicated that delays in passing the China hub tax credits would make it more likely that the Chinese would look elsewhere for their cargo hubs.
Slay said just keeping the freight-forwarding portion of the proposal would not be sufficient.
"The process is not yet over," Slay said. "In the end, if a bill is passed that's called Aerotropolis, but it doesn't provide the necessary incentives to make this work, then what's going to happen is we're not going to have an international trade hub in Missouri. And there are going to be a lot of jobs and economic opportunity that are going to be lost."
Dan Mehan, the president and CEO of the Missouri Chamber of Commerce, said in a statement that "anyone who has watched the legislative process, knows that lawmaking can often takes twists and turns."
"This is just another twist in the process," said Mehan, who has been involved in the China hub effort. "It may look different than the original proposal, but in the end, we will still achieve the goal of providing the facilities needed to export Missouri agriculture and manufacturing products throughout the world."
But Mayer wasn't so sanguine.
"The opposition to Aerotropolis has worked hard over the last six weeks," Mayer said. "It's obviously worked. And I think there are more questions that have been asked by senators and more information has been obtained. And so, what they were once comfortable with, now they don't feel too comfortable with."
At least one lawmaker -- Sen. Jim Lembke, R-Lemay -- suggested that the Senate take a markedly different course. In an exchange with Sen. Rob Schaaf, R-St. Joseph, Lembke said the legislature should eliminate all tax credits and subsequently lower or eliminate taxes the rates for everyone.
"This is what we should be doing," Lembke said. "We should be looking at a global tax policy that's fair and equitable for all Missourians, all taxpayers and all businesses in this state."
Asked what would happen if the House balks at the Senate's bill, Mayer said Tuesday evening that he was "just pleased tonight that we got this completed and perfected."
"Of course, we'll have to deal with that as the process moves forward," Mayer said. "We'll wait and see when that happens."
Jason Rosenbaum, a freelance writer in St. Louis, covers state government and politics.