Nixon calls special session on tax breaks for Ford, scheduled to start Thursday
This article first appeared in the St. Louis Beacon, June 18, 2010 - The day after trimming $301 million from the state's next budget, Missouri Gov. Jay Nixon announced today that he is calling a special session so that the Legislature can pass a tax-incentive measure to encourage Ford Motor Co. to retain its manufacturing plant near Kansas City.
The session is slated to begin at noon next Thursday, apparently in an attempt to complete work on the tax-break package before the Independence Day holiday weekend.
Nixon is pairing the tax-incentive measure with another bill to revamp the state's pension system for state workers. His administration says the pension changes would save the state about $10 million a year, about two-thirds of the cost of the tax breaks for Ford.
The governor said in a statement that the special session is needed to protect Missouri jobs.
"Automobile manufacturers and suppliers employ thousands of Missourians in every corner of the state, and it's vital that Missouri remain a hub of automotive production for generations to come," Nixon said in a statement. "As America's auto manufacturers reconfigure their operations to produce next-generation vehicles, it is absolutely critical that we are able to compete for the auto jobs of tomorrow. The Missouri Automotive Manufacturing Jobs Act will give us the ability to bring cutting-edge automotive jobs to our state, and I call on the General Assembly to send this important bill to my desk."
The tax incentives would cost the state up to $15 million a year over 10 years. Called the "Missouri Automotive Manufacturing Jobs Act," the governor's office explained that "it would allow qualified manufacturing facilities or suppliers that bring next-generation production lines to Missouri to retain withholdings taxes typically remitted to the state."
"To be eligible for these incentives, manufacturers would be required to make a substantial capital investment in production capacity and put people to work. Incentives would be triggered only after a company had made a firm commitment for that investment and workers were on the job."
Nixon has said for days that the tax breaks -- which died during the final hours of the legislative session that ended May 14 -- are crucial if the state wants to retain Ford.
"Ford Motor Co., which employs 3,700 workers at the Claycomo facility near Kansas City, is finalizing decisions about restructuring operations and locating production lines," he said today. "Other states, including Michigan, have come forward with aggressive proposals to compete for those jobs. This legislation would help Missouri compete to bring next-generation vehicle production to the state."
Under the proposed pension changes, future state employees would have to work longer and they would be required to contribute 4 percent of their salary to the state retirement plan. There also would be changes in the investment bodies that handle the funds -- a key reason why the pension proposal also died last session.
The Missouri Chamber of Commerce and Industry was quick to support the governor's call for a special section.
"Ford's manufacturing plant is an important part of the economic foundation of Kansas City and our state," said Daniel P. Mehan, president and CEO of the Missouri Chamber of Commerce and Industry. "The governor has made a good call to bring lawmakers back to Jefferson City to finish what they started and provide the tools needed for Ford, and other vital manufacturers in our state, to remain competitive and continue to provide Missouri jobs."
In any case, not all legislators are happy about Nixon's action -- including those within his own party. State Rep. Jamilah Nasheed D-St. Louis, swiftly issued a disparaging statement within minutes of the governor's announcement.
"One day after cutting $301 million from an already decimated state budget, including taking away $70 million from local public schools, Gov. Jay Nixon has chosen to call the General Assembly into an unnecessary special legislative session for the purpose of giving the Ford Motor Co. and its suppliers up to $150 million in taxpayer money over 10 years,'' Nasheed said.
"At a time when the state is struggling to provide for the welfare of its citizens, Missouri should not make the welfare of a profitable corporation a higher priority, especially when there is no guarantee Ford will keep its jobs in Missouri."