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Government, Politics & Issues

Legislature fails to pass tax credits for Lambert development, denies local control of St. Louis pol

This article first appeared in the St. Louis Beacon, May 13, 2011 - With about 40 minutes to go before the 6 p.m. deadline, the Missouri House passed an economic development bill that included about $360 million in tax credits for the long-sought China hub and dozens of changes in other state tax credit programs.

But it was too late. The state Senate declined to take up the bill in the minutes remaining, meaning that the proposed economic development bill -- and the city of St. Louis' long-sought local control of its police department -- died. Senate President Pro tem Rob Mayer, R-Dexter, said he was proud of the Senate's effort to pass its own economic development plan approved earlier, even though that had been rejected by the house.

But state Rep. Jamilah Nasheed, D-St. Louis, and the chief sponsor of the local control measure blamed the Senate for that bill's demise and angrily said it had been unfair for the Senate to link both measures. She blames state Sen. Jason Crowell, R-Cape Girardeau, for the demise of both bills. "He should have been taken down a long time ago," a furious Nasheed said.

Previously posted:

With the legislative clock ticking, negotiations continued this afternoon on economic development proposals that could lead to a House-Senate agreement on state tax credit revisions, including $360 million in breaks as part of the effort to persuade China to locate a cargo hub at Lambert St. Louis International Airport.

Those involved say some economic development pieces have been tacked onto different pieces of legislation before the House and Senate during the final hours this session. The deadline for approval in both chambers is 6 p.m. today.

Around 4 p.m., word of a possible breakthrough spread among some of the political players, who privately reported a bit more optimism that they had felt just hours earlier. But other sources say chances are fading.

A House-Senate deal on tax credits also is crucial to the future of an unrelated measure. Senate leaders say a tax-credit agreement is necessary before that chamber gives final approval of a separate bill granting St. Louis city officials local control over the city's police department, which has been under state supervision for 150 years.

Lack of an agreement on tax credits likely also will doom St. Louis' quest for local control.

But striking a deal still may not save the police issue, some involved confided late in the afternoon.

Late Thursday, state Sen. Eric Schmitt, R-Glendale, provided the first confirmed details of the House's unofficial tax credit proposals, aimed at countering the Senate's plan offered earlier this month. "We're going to try to bridge the gap,'' said Schmitt, the key Senate player in the China hub effort.

Schmitt -- the Senate's leader of the China hub effort, dubbed "Aerotropolis" -- cautioned that House negotiators' tax-break proposals may not be acceptable to the full Senate.

This morning, some involved said privately that the biggest point of dispute involves the Senate's quest to "sunset'' a number of state tax credits. 

The House tax credit proposal, Schmitt had said, calls for 10-year sunsets on some tax credits. The Senate proposals call for a four-year sunset. Friday's haggling involved efforts to find a middle ground, sources say.

The House plan would set a $90 million annual limit on historic-redevelopment tax credits, while exempting small developments and individual homeowners. The Senate plan calls for a $75 million-a-year lid. Both are well below the current annual spending of historic tax credits, which now approach $140 million a year.

The House plan, like the Senate, puts a cap of $100 million a year on tax credits for the developers of low-income housing. But the House plan has some extra exemptions.

Both plans phase out the longstanding tax credit for low-income elderly renters and the disabled, in effect since 1973. Schmitt confirmed that Nixon wants to earmark the savings -- $57 million a year -- for other programs helping the elderly, such as the tax break for prescriptions.

Schmitt said he's hoping that some compromise can be reached on the annual spending limits and on the sunset proposals, but he acknowledged that little time is left.

Earlier Thursday, economic-development players -- including the Missouri Chamber of Commerce and Industry -- gathered in the Capitol office of state Rep. John Diehl, R-Town and Country, hoping to hammer out the tax-credit deal.

Meanwhile, state Sen. Kevin Engler, R-Farmington, was doing what he could in the Senate to preserve the local-control bill for St. Louis.

The local control measure passed the state House months ago and seemed headed for approval in the state Senate earlier this week. But Senate leaders then announced they would not hold a final vote on the bill until the state House acted on an unrelated measure to revamp the state's tax credits. House leaders object to some of the proposed changes.

Thursday afternoon, the state Senate revived the local-control bill for brief discussion, then sent it back to the Senate Committee on Government Accountability and Fiscal Oversight -- where the measure had been earlier. Legislators say there would be a cost-savings if the St. Louis Board of Police Commissioners is abolished. Four of the five board members are appointed by the governor.

The Senate is "playing chicken with the House, obviously," he continued. "And one of the things on board that chicken is this bill."

Engler said if there's movement on the tax credit legislation, there will be subsequent action on the local control bill.

"I think there's a 49.8 percent chance of something happening," he said Thursday night, before the House proposal was presented privately to senators.

"I think there's a 90 percent chance of something happening (on local control) if there's action (on the tax credit legislation)," Engler concluded. "If nothing happens ... they both die together, I'm afraid."

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