St. Louis Call Newspapers

Senate passes modified version of China hub bill

Missouri senators passed and sent to the House of Representatives this week a scaled-down version of the tax plan proposed by the governor for the Legislature’s special session.

On Tuesday, Senate President Pro Tem Rob Mayer, R-Dexter, dropped $300 million in tax breaks to developers for building the infrastructure, including warehouses, to attract a Chinese airline to base an air cargo hub in the St. Louis area.

Mayer acknowledged he did not have the votes to pass the plan that the governor and legislative leaders had agreed upon.

“I don’t think that we could have gotten votes to pass the ‘Aerotropolis’ provision as we had it written out,” Mayer said.

Mayer’s decision to scale down the bill came after a closed-door Republican caucus late Monday night in which only a few members indicated they definitely would support the original proposal, members who attended the caucus said.

The caucus was held shortly after a briefing earlier that night for senators by a private company hired by the administration to study the financial impact of the plan. The results encompassed multiple scenarios, most of which only predicted a small positive return 10 years after the initial investment.

Several members expressed dissatisfaction with the predicted outcomes.

“Understanding that every dollar that we invest in this or any other economic incentive is a dollar that we’re not going to put in education or we’re not going to put in roads or we’re not going to put in bigger issues,” said Sen. Brad Lager, R-Maryville. “We need to understand what those returns and opportunity costs are.”

Mayer’s revised plan, approved Wednesday by the Senate, would retain $60 million in tax breaks to companies that help facilitate shipments for international export. Mayer and the House speaker said there might be a possibility for the warehouse tax breaks to be implemented through another provision in the bill for economic development, called “Compete Missouri.”

During Senate debate, members deleted another key provision of the proposal that would have terminated tax credits for lower income elderly and disabled people who rent their homes.

“We ought to treat poor people who aren’t lucky enough to own their homes the same as those who are,” said Sen. Rob Schaaf, R-St. Joseph.

Elimination of the “circuit breaker” for renters was one of a number of reductions and eliminations of tax credits that currently cost the state more than $500 million per year. Schaaf’s amendment, approved by the Senate 17-16, cut the projected savings in the bill by nearly half.

Wednesday, the Senate gave formal approval to the revised tax package 26-8.

Sen. Jim Lembke, R-Lemay, voted against the bill, saying it still fails to protect small businesses.

“I’m concerned about those small businesses in the first senatorial district that have never come to the state and asked for one red cent of tax credit money,” Lembke said.

Senators who voted in favor of the bill said it would promote local business and foster economic growth. However, it ran into immediate criticism from the House speaker, who announced House action would be delayed until the middle of next week.

“When you’re talking about a bill that’s this big, I think it would be dangerous just to rush it, just for time’s sake,” said House Speaker Steve Tilley, R-Perryville. “So we’re going to take our time. I want an in-depth analysis of what it does and what was changed from the deal.”

– Missouri Digital News

    Senate passes modified version of China hub bill

    Missouri senators passed and sent to the House of Representatives this week a scaled-down version of the tax plan proposed by the governor for the Legislature’s special session.

    On Tuesday, Senate President Pro Tem Rob Mayer, R-Dexter, dropped $300 million in tax breaks to developers for building the infrastructure, including warehouses, to attract a Chinese airline to base an air cargo hub in the St. Louis area.

    Mayer acknowledged he did not have the votes to pass the plan that the governor and legislative leaders had agreed upon.

    “I don’t think that we could have gotten votes to pass the ‘Aerotropolis’ provision as we had it written out,” Mayer said.

    Mayer’s decision to scale down the bill came after a closed-door Republican caucus late Monday night in which only a few members indicated they definitely would support the original proposal, members who attended the caucus said.

    The caucus was held shortly after a briefing earlier that night for senators by a private company hired by the administration to study the financial impact of the plan. The results encompassed multiple scenarios, most of which only predicted a small positive return 10 years after the initial investment.

    Several members expressed dissatisfaction with the predicted outcomes.

    “Understanding that every dollar that we invest in this or any other economic incentive is a dollar that we’re not going to put in education or we’re not going to put in roads or we’re not going to put in bigger issues,” said Sen. Brad Lager, R-Maryville. “We need to understand what those returns and opportunity costs are.”

    Mayer’s revised plan, approved Wednesday by the Senate, would retain $60 million in tax breaks to companies that help facilitate shipments for international export. Mayer and the House speaker said there might be a possibility for the warehouse tax breaks to be implemented through another provision in the bill for economic development, called “Compete Missouri.”

    During Senate debate, members deleted another key provision of the proposal that would have terminated tax credits for lower income elderly and disabled people who rent their homes.

    “We ought to treat poor people who aren’t lucky enough to own their homes the same as those who are,” said Sen. Rob Schaaf, R-St. Joseph.

    Elimination of the “circuit breaker” for renters was one of a number of reductions and eliminations of tax credits that currently cost the state more than $500 million per year. Schaaf’s amendment, approved by the Senate 17-16, cut the projected savings in the bill by nearly half.

    Wednesday, the Senate gave formal approval to the revised tax package 26-8.

    Sen. Jim Lembke, R-Lemay, voted against the bill, saying it still fails to protect small businesses.

    “I’m concerned about those small businesses in the first senatorial district that have never come to the state and asked for one red cent of tax credit money,” Lembke said.

    Senators who voted in favor of the bill said it would promote local business and foster economic growth. However, it ran into immediate criticism from the House speaker, who announced House action would be delayed until the middle of next week.

    “When you’re talking about a bill that’s this big, I think it would be dangerous just to rush it, just for time’s sake,” said House Speaker Steve Tilley, R-Perryville. “So we’re going to take our time. I want an in-depth analysis of what it does and what was changed from the deal.”

    – Missouri Digital News

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      Senate passes modified version of China hub bill