The Missouri General Assembly effectively ended its work for the special session on Friday but left the door open to continue if the two chambers manage to compromise on the China cargo hub/tax break bill that has divided them.
The legislature adjourned and agreed to set technical sessions, which few members are required to attend, to simply keep the session going in case they strike a deal, but leaders have said chances that will happen are slim. The special session effectively ended without the legislature passing many of the major issues presented to lawmakers by the governor.
In the morning, the House passed and sent the governor two measures — a fix to the restriction on school staff using social media to communicate with students and a bill providing tax breaks to businesses involved with science, health and technology.
The House did not take up the main issues of the session — the package of business tax breaks for a China air cargo transport hub in St. Louis and cuts in existing tax credits.
Indications that Republican leaders were considering giving up arose when House Republicans ended a two-hour closed-door caucus Thursday night with no decision announced on whether to continue efforts to pass the bill or quit.
In the end, leaders decided to adjourn until next week, holding out what the House speaker acknowledged was a slim chance the Senate would agree to a compromise.
On Thursday, the House Economic Development Committee twice postponed a vote on the tax-break bill, with the committee chair saying more time was needed to work out a compromise. Eventually, the committee adjourned without taking any action.
Wednesday, the top leader of the Missouri Senate emerged from a Republican caucus saying a majority of his members favored simply ending the special session without passing the governor’s tax bill.
Earlier in the day, Republican leaders in the House announced what they termed a compromise plan for providing tax breaks for the China air cargo hub. However, Republican Senate President Pro Tem Rob Mayer told the Senate he had not been given a copy of the plan nor had he been involved in any discussions.
Mayer said the House version is not acceptable to the Senate because, among other things, it does not make deep enough cuts in special interest tax credits that cost the state more than $500 million per year in lost tax revenue.
The key provision of the tax measure would award tax breaks for development of the air cargo transport hub in St. Louis. The plan, proposed by Gov. Jay Nixon, also includes tax breaks for digital data centers, amateur sports contest organizers and business development.
The stumbling block has been Senate insistence that the bill include deep cuts in various tax credits to lower-income residents, developers and businesses and for selected activities that altogether cost the state more than $500 million per year.
On Monday, the House Economic Development Committee heard impassioned testimony from St. Louis Mayor Francis Slay.
Slay said if the bill is not passed, China will lose interest in trade with Missouri and turn to other cities it’s already looking at, such as Cincinnati, some of which are also preparing incentives. The deal could open trade from St. Louis to other areas such as Brazil, South America and Africa. China wants to use the Midwest to open trade with other countries, Slay said.
The first Chinese flight will be landing at Lambert-St. Louis International Airport this weekend, with flights once a week to test if exports can match flight activity, Slay said.
“If some reasonable form of this does not pass, then my prediction is that we will lose the opportunity and they will go someplace else,” Slay said.
The committee also heard from opponents such as Bob Wood from Glasgow, who said he spent the past 20 years using a St. Louis warehouse to store Chinese goods and argued that the state shouldn’t give tax credits to developers for the same thing.
“There’s a lot of money going to people who maybe don’t need that help,” Wood said.
Another witness, Ron Calzone, compared the government handing out tax credits as mercantilism similar to the colonial Tea Act of 1778. Calzone and others asserted that tax credits were unconstitutional and did not treat people as equals. Several witnesses who identified themselves as members of the Tea Party wanted government to step aside, using models such as John Locke’s Wealth of Nations.
“Unfortunately, the world has changed, and it seems like working hard and doing the right thing isn’t enough,” said Rep. Michael Brown, D-Kansas City. Brown engaged in heated conversations with multiple witnesses, saying the free market approach would not work in “undesirable” areas like his district.
“Where I come from, if you have a chain and there’s a weak link in the chain, the smartest thing to do is support the weak link so that the overall chain is strengthened,” Brown said. “And I think that’s what we’re trying to do.”
-Missouri Digital News
