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Senate votes against going to conference on economic development bill, killing it

This article first appeared in the St. Louis Beacon, Oct. 18, 2011 - Gov. Jay Nixon is expected to head to China within days as part of a delegation seeking to encourage more trade, and the creation of a cargo hub at Lambert-St. Louis International Airport.

But the group will have to explain why the General Assembly killed an economic development package that, among other things, included tax incentives that were to demonstrate state support for the hub.

St. Louis is among several cities in the Midwest competing to be chosen by China as a hub location.

The Missouri Senate voted Monday afternoon against going to conference with the state House to try to reach a compromise regarding the economic development bill. Instead, the Senate called for the House to drop its version and approve the Senate's plan.

The Senate's move, taken with a voice vote, in effect ends the weeks of debates over the package -- which had been the prime reason for the legislative special session that began Sept. 6.

"If they don't want to go to conference, the Senate killed the bill,'' said state House Steve Tilley, R-Dexter. Tilley emphasized that the House will not agree to the Senate version, but had been open to compromise.

Mayer Explains Change in Position

While Senate Pro Tem Rob Mayer, R-Dexter, said last week that the Senate wanted to go to conference, by Tuesday, Mayer was explaining what caused the Senate to change course.

For one thing, Mayer said he had wanted to end the special session this week. This meant, he said, that negotiations on the economic development bill should have ramped up on Monday and Tuesday. But the House decided not to come back into full session until Thursday. Since the House needs to vote to go to conference before naming conferees, it became increasingly unlikely that negotiations would begin until later in the week.

Mayer also said he got word that Tilley would not budge on placing "sunsets" on the historic preservation tax credit and the low-incoming housing tax credit. That's been one of the biggest sticking points between the House and Senate versions of the legislation.

Without any window for compromise, Mayer said going into conference wasn't likely to be productive.

"I've seen how this movie ends; there's no need to watch it again," Mayer said. "We knew where we were headed and all indications have been since we've been back in special session ... that [the House] would not place seven-year sunsets on those two tax credit programs. So there's no need beating our head up against the wall."

Mayer and other senators have argued sunsets are the only leverage the General Assembly has to change the tax credits. But House members from both parties argued such action would make those tax credits vulnerable to extinction if a senator filibusters the programs' reauthorization.

The collapse of the package contrasts with this summer's high-profile series of news conferences around the state, where legislative leaders declared they had a deal on an economic development bill aimed at encouraging job creation. The promise of a deal was what prompted Nixon to formally approve a special session.

Most of the 'deal' dies

The session cost taxpayers about $214,000, largely for per-diem payments to lawmakers.

Both versions include $60 million in tax incentives aimed at encouraging China to locate a regional cargo hub at Lambert-St. Louis International Airport, down from the initial $360 million sought.

The House proposal also cuts the corporate income tax, while the Senate version combines a number of existing tax credit programs into a broader setup called "Compete Missouri."

Tilley noted that Senate leaders last week said "they wanted to go to conference," but he added he wasn't surprised by today's change of heart in the Senate.

"This just highlights why the Senate is completely dysfunctional," the speaker added.

Tilley said he wanted to emphasize that it was the House -- not the Senate -- that passed all the bills that had been on the special session's agenda, as stipulated by the governor.

Mayer noted that his chamber did pass economic development bills in the regular session and the special session.

"I am very proud of both of those pieces of legislation and proud of what the Senate accomplished," Mayer said.

The now-dead measure initially included a series of provisions:

  • Enacting the proposed Compete Missouri Initiative, that includes tax breaks and incentives to attract and retain businesses and improve the state's job-training programs.
  • Authorizing tax breaks to attract amateur sporting events to Missouri.
  • Imposing "sunsets" and restrictions on a variety of state tax credit programs.
  • Granting "amnesty" to errant taxpayers who owe unpaid back taxes.
  • Approving special tax breaks to encourage the development and construction of high-tech data centers.

The final version of the China Hub proposal, in the House and Senate proposals, called for $60 million to encourage freight-forwarders to direct international cargo traffic to Lambert.
The only element that did survive was a proposal, shifted into a separate bill, that created the long-sought Missouri Science and Innovation Reinvestment Act, known as MOSIRA, to encourage the growth of science-related businesses, including those involving the life sciences.

The MOSIRA bill, which did pass both chambers, had a provision stating that it went into effect only if the larger economic development package also was approved. Nixon has said lawyers are looking into whether that requirement can be tossed out, to save MOSIRA.

Local control dies as well

The Senate's action also kills off another measure, which would have granted the city of St. Louis control of its police department. The state has overseen the city's police force since the Civil War.

The state House had approved a local control bill this spring, and most recently during the special session. The state Senate killed the bill during the regular session, and again during the special session, because its passage had been linked to the economic development bill.

Joe Keaveny, D-St. Louis, contended that the local control legislation became "collateral damage in the fight between the House and Senate over tax credit reforms."

"After months of negotiations, all of the players involved in this process finally came together and rallied behind our efforts to return local control to the St. Louis Police Department," Keaveny said. 

"Unfortunately, the bill has been taken hostage again in the debate over tax credit reform. We were close to reaching a final agreement on local control at the end of the regular session, but leadership in both chambers delayed the final vote until they reached a deal on an economic development package and tax credit reform. When those deals fell through, local control died as well. It's unfortunate that the lives and well-being of our police officers could be negatively affected by political bickering in the Capitol."

Some information for this story was provided by Jason Rosenbaum.

Jo Mannies is a freelance journalist and former political reporter at St. Louis Public Radio.