This article first appeared in the St. Louis Beacon, Sept. 23, 2011 - The proposed economic development package that prompted the Missouri General Assembly's special session remained in limbo Friday after both chambers adjourned -- but not necessarily for good.
Both said the chambers could reconvene if a deal is struck in the next few weeks.
The Senate shut down around 3:30 p.m., a few hours after the House did so.
The Senate appears to have killed the bill, which already passed the House, that would have granted St. Louis local control of its police department. The Senate committee slated to hear the bill at 1 p.m. today canceled its meeting without explanation.
The House did approve Friday morning the Senate version of the Missouri Science and Innovation Reinvestment Act, sending it on to the governor. Passage came after the House narrowly rejected, 74-68, a proposal to add language -- sought by Missouri Right to Life and others -- that would bar research involving cloning or human embryoes.
Opponents of the added language included legislative leaders who oppose abortion, but said the amendment was unnecessary and redundant. Instead, they argued, the addition would kill the bill. Advocates contended that scientific researchers might be able to skirt the current law.
But the MOSIRA bill has a clause near the end of the legislation that states the bill doesn't go into effect unless the broader economic development bill passes. House Speaker Steve Tilley said that clause may be thrown out in court if there's a legal challenge.
The economic development package, in a separate bill, got stuck in the House Economic Development Committee, which delayed a vote Thursday and then cancelled its Friday meeting, because of continued disputes with the Senate.
House Majority Leader Tim Jones, R-Eureka, told reporters that it was unlikely that there would be progress between the two chambers. Tilley said the fact that the House didn't completely adjourn would provide a lifeline if an agreement can be reached.
But Tilley minced no words about the way the Senate operates. "Functionally, the Senate's broke -- where a couple of people can dictate what happens over there," Tilley said. "And there's no way we're going to put 'sunsets' on two programs that we are think are worthwhile when the Senate's broke like that."
Tilley was referring to the Senate's desire to place sunsets on the historic preservation tax credit and the low-income housing tax credit.
Tilley said he did not believe the special session was a failure. Aside from MOSIRA, both chambers approved the change to the so-called "Facebook law" dealing with student-teacher Internet communications
"Clearly I think the Senate should take up and pass the three House bills that they have," Tilley said. Those measures include bills to end state control of the St. Louis Police Department and to move the state's presidential primary to March.
House Minority Leader Mike Talboy, D-Kansas City, said there was still hope for the key special session items.
"We still have a substantial amount of time left in the special session under the constitution; it's 60 days and we're not even halfway through " Talboy said. "But I can tell you that the frustration level and people's disappointment that we haven't been able to see something is very high right now."
State Senate leaders, who passed their version more than a week ago, have remained angry that the House crafted an alternate package earlier this week by negotiating with Gov. Jay Nixon's office.
Senate leaders reaffirmed Thursday that they were pessimistic about any agreement.
Senate President Pro Tem Rob Mayer, R-Dexter, told reporters that the rest of the bills on the Senate's plate also could die as well. They include the proposals to give St. Louis local control of its police department and to move Missouri's presidential primary to March.
The special session's focus was to be on the economic bill, Mayer said, and if that falls through, "people's energy levels are at a point where they don't have a desire to work on those other pieces of legislation."
House Majority Leader Tim Jones, R-Eureka, emphasized to reporters that the House previously passed such bills before zeroing in on the economic development package. Jones confirmed that House-Senate talks were continuing but emphasized that no economic-development deal has been struck.
"Whether we come back next week or the week after is still up in the air," Jones said. House Republicans plan to caucus Thursday night to discuss the matter.
Jones acknowledged that many Republican legislators were concerned about the provisions in the economic development bill aimed at encouraging the Chinese to locate a cargo hub at Lambert-St. Louis International Airport. Some rural legislators are critical of the whole project, while some in the Kansas City area would prefer to see their airport in contention.
There's also the longstanding difference between the two chambers over imposing "sunsets'' on state tax credit programs. The Senate is adamant that the programs should face sunsets of four or seven years, unless the General Assembly reauthorizes the program. House leaders object to sunsets in general, saying they fear one or two senators could kill off a worthy program.
In any case, Jones contended that Nixon and his economic development team should shoulder some of the blame for the House-Senate dispute. Jones said that House legislators have become warier about the Senate's proposed package because of an increased public outcry over a failed economic-development effort in Moberly, Mo.
"The common flashpoint in all of this is the governor's involvement and the Department of Economic Development,'' Jones said.
At issue is the increased press attention on the troubled Mamtek U.S. project that was supposed to bring 600 jobs to Moberly, for a new plant to manufacture an artificial sweetener, Sweet-O. The city issued $39 million in bonds to help build the plant. Nixon appeared at an event in 2010 to announce $17 million in state tax incentives for the project, should the jobs materialize.
The project has collapsed. Nixon's staff has noted that no state money was wasted because state tax credits are issued only after the jobs are in place. But some Moberly officials say the state's involvement contributed to their decision to guarantee the $39 million in bonds. Mamtek has defaulted on the first payment, potentially putting the city on the hook.
But Jones said the episode was an example of too much discretion by the governor in awarding tax credits.
He contended that the Mamtek debacle is a key reason the House is opposing the "Compete Missouri" provision in the Senate bill, which combines several existing tax credit programs within the Department of Economic Development.
Economic Development director David Kerr told the House committee earlier this week that Compete Missouri offers the same safeguards and accountability that are in the existing tax credit programs that would be merged.
Jones disagreed, contending that Compete Missouri "removes oversight and discretion like never before."
Nixon's staff declined comment Thursday.
MOSIRA Survives
The full House voted 94-48 to pass the Missouri Science and Innovation Reinvestment Act, also known as MOSIRA, which offers tax breaks to attract scientific and high-tech firms to the state.
The Senate had shifted MOSIRA into a separate bill. On Thursday, the House committee swiftly approved that bill, 18-3, after chairwoman Anne Zerr, R-St. Charles, said she had assurances from House leaders that there would be floor debate over wording that anti-abortion groups want to add.
The floor debate did occur for about an hour Friday.
MOSIRA advocates have said that constitutional questions could arise over the proposed wording, which seeks to bar the act from helping to fund any research involving cloning or human embryos. Some of the research the anti-abortion groups oppose is allowed under Amendment 2, a provision of the state constitution narrowly approved by Missouri voters in 2006.
House Speaker Steve Tilley had promised a floor vote on the issue. He did so after some anti-abortion groups sent out emails citing the hefty campaign donations that Tilley has received over the years from the political action committee, Supporters of Health Research & Treatments, that is aligned with groups that supported Amendment 2.
Tilley told reporters after the vote that he did support embryonic stem cell research, but he opposed using public money to do it.
Senate Firm On 'Sunsets'
Thursday's turn of events in the House overshadowed the earlier news conference by Senate leaders who detailed their objections to the unofficial House draft they had received late Wednesday.
Mayer, R-Dexter, and Senate Majority Floor Leader Tom Dempsey, R-St. Charles, asserted in particular that in the House version of the economic-development package, "the taxpayer protections are too lax."
The duo cited, in particular, six major concerns:
- The House's elimination of the Senate's proposed seven-year sunsets on the state's two largest tax-credit programs, which deal with historic preservation and low-income housing. Mayer cited the two programs' combined annual cost of more than $250 million annually and the lack of mandatory reviews of the programs or their recipients.
- The House's new language for the existing BUILD program related to "projected jobs," as tied to a building's square footage, "and the failure to require a dollar-for-dollar return on investment" for warehouses and distribution centers.
- The House bill's "expedited process of awarding historic preservation credits without state verification of the expenses actually incurred."
- Extending the existence of the Missouri Development Finance Board to 2014. Mayer's bill kills off the board upon the measure's enactment.
- House language regarding the operating budget of the Missouri Housing Development Commission, which the Senate leaders say are "beyond the scope of the governor's call" which set up the perameters for the special session.
- A House provision that senators say "would limit the state's ability to recapture tax credits for entities that have failed to meet their obligations."
During the Thursday news conference, Mayer also reaffirmed his aim to curb overall state spending on tax credits.
"Every day we delay reining in spending on state tax credits, we are putting funding for education, social services and other critical functions of state government more at risk," said Mayer. "We're spending half a billion dollars a year on tax credits, plus the state has more than $2.5 billion in tax credit liabilities. The writing is on the wall, we must corral spending on these credits."
The Senate bill, he and Dempsey said, focused on "performance-based tax incentive programs to help spur job creation while requiring mandatory reviews and caps to dramatically reduce the amount spent on tax credits annually."
The Senate contends its version will save taxpayers $947 million over the next 15 years.
Illinois Wooing China?
Missouri's scuffle over the economic development bill comes as neighboring Illinois appears to be seeking to strengthen economic ties with China.
Earlier this week, Illinois Gov. Pat Quinn announced $300 million in new trade agreements with China.
And on his Twitter account, Quinn even posted a humorous picture of him eating Asian carp. That fish has wreaked havoc on the Great Lakes.
Quinn's actions put on display the competition between Chicago and St. Louis over Chinese trade.
Supporters of the Lambert China Hub effort have pointed to overcrowding at Chicago's O'Hare International Airport as a reason to steer cargo to places like St. Louis.
St. Louis Mayor Francis Slay and other politicians have said that the Chinese would consider looking elsewhere if Missouri doesn't act.
When asked if the focus on tax credit austerity was providing an advantage to other states, Mayer said he's "not fearful of competing with any other state for business or economic development."
"Missouri has some good tools to attract business and industry," Mayer said. "Obviously there is talk about the Aerotropolis project going to another city. And so we believe that project, like a lot of the other economic development provisions, hold a lot of promises to create jobs and economic commerce. So we'd like to see that happen in Missouri."
But he acknowledged that, barring a last-minute deal with the House, that debate may need to be continued until the regular session begins in January.
