By AP/KWMU
Jefferson City, MO – Developers could get some big tax breaks to fix up large sections of low-income land, under a massive economic development bill sent Thursday to Gov. Matt Blunt.
The House gave final approval to the bill on a 145-10 vote, even though supporters acknowledged the bill contained at least two troublesome provisions that could need later correction.
At the heart of the bill is Blunt's plan to expand an existing tax break for businesses that add jobs providing health care benefits and decent wages. But senators loaded up the bill last month with numerous other tax breaks, some of which they didn't even expect to survive in the bill's final version.
After efforts to reach a compromise version failed, the House on Thursday reversed its previous position and simply accepted the gigantic version passed by the Senate. Sponsoring Rep. Ron Richard, (R-Joplin) estimated the total package would cost more than $100 million each year.
Among other things, the bill would provide tax breaks for investors in small businesses, Missouri-made movies, beef cattle sales and alternative fuel vehicles.
One of the costliest provisions added in the Senate would create a new tax credit for developers that acquire at least 75 acres worth of parcels in impoverished areas and bundle them together for a big project.
Developers could get a tax credit equal to half their acquisition costs, defined to include not only the purchase price but also the cost of environmental assessments, demolition of vacant buildings and maintenance of the property for up to five years after they bought it. The tax credits also would wipe out the developer's entire interest costs for up to five years.
The bill allows up to $100 million of such tax credits to be awarded, with no more than $12 million each year.
The tax break is intended to help but is not limited to run-down urban areas. "These areas that look like war zones that are just not getting redeveloped, it's because there's so many tracts of land that no one can afford to put them all together and develop them," said House Speaker Rod Jetton (R-Marble Hill).
Blunt told The Associated Press on Thursday that he supports the concept of the land assemblage tax credit but wants to review its final language.
"I want to ensure it's not some sort of corporate giveaway that it really is meeting a significant purpose and, but for that credit, that activity wouldn't happen," Blunt said.
Some critics fear it is a corporate gift, specifically for O'Fallon-based McEagle Properties, which has bought various St. Louis properties for redevelopment.
"We can't afford it," said Rep. Jeanette Mott Oxford (D-St. Louis) who cited the land assemblage tax credit as her main reason for voting against the bill. "It would appear to be a sweetheart deal."
McEagle's founder and chairman, Paul McKee Jr., did not immediately return telephone calls Thursday. McKee also helped found PARIC Corp. construction, which operates from the same building as McEagle.
Since January, those two companies contributed $20,000 to Blunt, $10,000 to Republican Lt. Gov. Peter Kinder and $3,188 to Senate President Pro Tem Michael Gibbons (R-Kirkwood) who is running for attorney general. Those companies also have contributed to Democrats in the past.
The legislation also would raise the annual $12 million statewide cap on Quality Jobs tax credits to $30 million. That program, enacted two years ago, applies to certain employers who add jobs with wages that are at least average for their area and who pick up at least half the premium of their employees' health insurance.
The bill also contains a sales tax break intended to entice a wholesale distribution business to Missouri. But Rep. Shannon Cooper (R-Clinton) who initially supported that tax break, said he now believes it could put Missouri-based businesses at a competitive disadvantage, shouldn't be granted and instead should be quickly repealed.
Other lawmakers questioned a provision added in the Senate that would legalize ticket scalping but limit people to buying 20 tickets at a time, unless they buy the tickets through a group sales office.
Reps. Brian Yates (R-Lee's Summit) and Trent Skaggs (D-Kansas City) said the provision would effectively outlaw season ticket sales by professional sports teams, or force them to creatively sell season tickets as if they were group plans.
"I think this is going to have some very bad consequences for our sports teams in this state," said Yates, who nonetheless voted for the bill.