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Missouri House leaders scramble to save the governor’s agriculture incentives bill

Rep. Brad Pollitt, R-Sedalia, discusses a package of tax incentives for rural projects he was sponsoring during floor action Wednesday during the special legislative session.
Tim Bommel
Missouri House Communications
Rep. Brad Pollitt, R-Sedalia, discusses a package of tax incentives for rural projects he was sponsoring during floor action Wednesday during the special legislative session.

Passing a package of tax credits for rural economic projects should have been the easy part of Missouri Gov. Mike Parson’s special session agenda.

A bill with everything he requested passed with big bipartisan majorities during the regular session, the only opposition coming from conservative Republicans who dislike tax credits generally.

But when the bill came up Wednesday in the Missouri House, it received just one vote more than constitutionally required to pass. And just to get it to that vote, House Speaker Rob Vescovo had to add three new supporters at the last minute, including the bill’s sponsor, to a crucial committee.

The special session is about half way through its work. The House will work on tax cut bills this week and the Senate will resume action next Monday.

With the November election only six weeks away, Republicans need to pass both bills to show core constituencies they can deliver. The close margin on the rural incentives bill shows how tactical missteps and factional fighting could upset those plans.

Trouble for the rural incentives bill began when the House GOP leadership shut off debate Wednesday morning as several Democratic members stood waiting to offer amendments.

In response, 25 Democrats voted “present” on the ensuing vote. That signaled that the bipartisan support the bill once enjoyed was evaporating. The final vote would be tight, leadership realized, because of the GOP members opposed to all tax credits.

And it meant that before that final vote in the afternoon, there was potential trouble in the House Fiscal Review Committee, which had to approve its $40 million price tag . Democratic opposition and two absent Republicans meant it could be defeated, Republican Rep.Doug Richey, the committee’s vice chairman, said in an interview.

“Looking at the head count there and the way the votes were calculated, I would say probably so,” Richey, R-Excelsior Springs, when asked if the bill would have failed without intervention by Vescovo. “(Committee Chairman) Travis (Fitzwater) and I would have been the only yes votes, and there would have been three no votes, with those who were present.”

Republican state Rep. Sara Walsh of Ashland voted against the bill in the morning session and was expected to oppose it in the fiscal review committee as well. The two Democrats, Reps. Donna Baringer of St. Louis and Betsy Fogle of Springfield, voted for the bill in the morning session but weren’t ready to back it in the committee hearing.

State Rep. Betsy Fogle, D-Springfield, speaks during the April 5 debate on the fiscal 2023 state budget.
Tim Bommel
Missouri House Communications
State Rep. Betsy Fogle, D-Springfield, speaks during the April 5 debate on the fiscal 2023 state budget.

“There was a lot of frustration and a lot of surprise, and disappointment that the process rolled out the way that it did,” Fogle said of debate being cut off before Democrats could offer their amendments.

Fogle was talking to Fitzwater about the upcoming vote when state Rep. Peter Merideth, D-St. Louis, arrived and told them he had just been added to the committee.

Fitzwater “was unaware of it and left the conversation to figure out what was going on,” Fogle said.

Fitzwater could not be reached for comment.

Vescovo replaced state Rep. Jason Chipman, who was absent, and increased the size of the committee by two Republicans, which meant Democrats had another seat and that was Merideth.

The Republicans added to the committee were Rep. Brad Pollitt, sponsor of the bill, along with Reps. Don Rone and Rick Francis, chairman and vice-chairman of the House Agriculture Policy Committee.

Pollitt said he wasn’t aware the bill faced defeat in the committee when he was told to report to the meeting.

“There were people absent that were on fiscal review, and someone from the speaker’s office came and said ‘go to fiscal review,’” Pollitt said.

Rone said he was asked to sit in place of an absent member and he agreed.

“There is one boss up there and that’s the speaker,” Rone said.

When the committee vote finally came, it was 5-2-2, with Merideth and Walsh opposed. Fogle and Baringer voted present.

“What you saw right before fiscal review was called to order was the speaker expanding fiscal review to add members who he knew would support it,” Fogle said. “It is in the rules, but not something I have seen done.”

Richey opposed the bill during the morning floor vote but said the fiscal review committee was not the place for one of two bills being considered in the special session to be defeated.

“Obviously, in the special, you are not going to have a bill that is that significant die,” Richey said, noting he became aware of the expanded committee when the meeting began. “I wasn’t in those conversations.”

Bipartisan breakdown

Parson asked lawmakers for a simple fix to a bill he vetoed. Instead of a two-year sunset on the tax credits and other incentives, Parson wanted the programs in place for six years.

In the regular session, that’s how the bill started. All the elements in the special session bill were in the regular session version, along with a six-year sunset, when the House passed it 120-30 on Jan. 27. Every Democrat present that day supported it.

It had bipartisan support because the bill included Democratic-sponsored ideas, including incentives for urban farming and specialty crops, as well as tax credits to promote biofuels and small producers.

Rep. Don Rone, R-Portageville, at microphone, answers a question from Rep. Mike Haffner, R-Pleasant Hill, during a debate on a package of tax incentives for rural projects.
Tim Bommel
Missouri House Communications
Rep. Don Rone, R-Portageville, at microphone, answers a question from Rep. Mike Haffner, R-Pleasant Hill, during a debate on a package of tax incentives for rural projects.

One provision expands a program to give bankers tax credits for waiving interest on the first year of farm loans to producers who have less than $500,000 in market sales. The current program is capped at $250,000 in sales.

Large commodity producers, growing corn, soybeans, cotton or rice, are likely to have more in sales than that cap. A farmer with 1,000 acres can receive more than $1 million at current prices and predicted yields for corn and cotton, and almost $700,000 for soybeans.

“This is designed for the young people that are wanting to get started farming, 250 to 300 acres, and they need the help getting started,” said Rone, of Portageville. “All the farmers around here are getting older.”

In the run-up to the special session, attention focused on Parson’s push for an income tax cut.

Legislative leaders worked out a plan to pass the tax cut bill first in the Missouri Senate, where members have the greatest opportunity to delay bills and where the now-defunct conservative caucus had used the rules for that purpose repeatedly in the regular session.

The Senate tax debate, however, went smoothly, though not without the use of some parliamentary maneuvering to limit amendments. And the Senate voted on a bill with the rural incentives, passing it with a bipartisan majority of 26-4.

And the House debate on rural incentives seemed to be a model for bipartisanship as well — until debate was shut off.

Rone and Pollitt discussed the bill at length with Democratic members to highlight the provisions that both parties had supported in the past.

Last week’s debate “was the sixth time we have talked about this ag bll in the last year,” Pollitt said.

The two amendments Democrats had prepared were intended to inject the issue of foreign ownership of Missouri farmland into the debate and to prohibit state elected officials from benefiting from the tax credits.

The political amendments were unlikely to pass, and their immediate targets were Attorney General Eric Schmitt, the Republican nominee for U.S. Senate, and Parson.

In the GOP primary, opponents attacked Schmitt’s 2013 votes as a state senator to lift the ban on foreign ownership of farmland. The bill legalized the sale of Smithfield Food’s Premium Standard Farm hog operation in north Missouri to a Chinese conglomerate.

Democratic Senate candidate Trudy Busch Valentine has kept up the criticism as she campaigns against Schmitt.

Parson raises cattle on 47 acres in Polk County.

Democrats had identified three areas of the bill where Parson could potentially benefit, Meredith said. He could be eligible for interest waivers on loans for his farm from two programs and the bill has a sales tax exemption for the purchase of utility vehicles used for farming purposes.

Meredith’s amendment would have prohibited state elected officials “eligible to receive a pension” from benefit from the programs.

Pollitt said it was “absurd” that any portion of the bill was designed for Parson’s benefit.

“I did not have one individual entity talk to me about tax credits for their personal gain,” Pollitt said.

The amendment about foreign ownership would have barred any entity owned by foreign interests from participating in the incentive programs.

Rone, who is term-limited, said he agrees with efforts to limit foreign ownership of farmland but hasn’t been able to get a bill moving because of lobbying opposition. One idea he had was to apply the 1% limit to each county, which would force the sale of Premium Standard Farms.

“Somebody needs to start the process and get that done,” Rone said.

It was the act of shutting off debate that angered Democrats, Fogle said. They knew they were unlikely to get their amendments passed.

“We were up there for the singular reason for producing an ag bill and we were given zero opportunity to discuss this bill,” she said. “A process was not followed in a way that was fair to the minority party.”

On the morning vote, where a simple majority was needed to move the bill ahead, 13 Democrats voted for the bill. Only 27 members voted no, so the result was not in doubt.

But when the afternoon vote came, which required 82 votes under the constitution, the bill needed help. Only five Democrats voted for it, six Republicans who voted against it in the morning changed their votes and it received 83 votes.

“You saw yesterday that people hit their limit on how much they are willing to take before people stand up and do something about it,” Fogle said. “At some point we have to stand up and say ‘you have gone too far, we deserve our amendments to be heard.’”

Richey was one of the members who changed his vote. He had never voted in favor of tax credits for economic incentives, he said.

Credits that help agriculture are less onerous than some others, Richey said.

“To unravel that tangled web, you are not going to do it on that bill,” he said. “I decided I would make sure it didn’t die.”

This story was originally published by the Missouri Independent, part of States Newsroom, a network of news outlets supported by grants and a coalition of donors as a 501c(3) public charity. Missouri Independent maintains editorial independence.

Rudi Keller covers the state budget, energy and state legislature as the Deputy Editor at The Missouri Independent.