Update: Missouri Senate Approves Tax Credits Compromise
JEFFERSON CITY, Mo. (KMOX) – With two days left in this year’s legislative session, Missouri senators have moved on changing the amount of tax credits issued by the state.
In a 28-3 vote the Senate passed a measure Wednesday that caps the amount of tax credits available for historic buildings at $75 million, down from its current cap of $140 million. Only about $110 million of this credit was used over the past year.
The cap on the historic preservation credit came as part of a compromise between state senators on how to deal with the state’s tax credits, an issue that brought last year’s special session to a standstill.
In addition to the cap, the compromise allows additional tax credits to be allotted for the attraction of amateur sporting events to the state as well as putting a one-year sunset on other “benevolent” tax credit programs, such as one for food banks. Supporters of the compromise said the deal came out of the need for tax credit reform to rein in state spending while still allowing Missouri to attract businesses.
Despite the compromise in the Senate, House leadership said the historic tax credit changes were not acceptable for the House.
The bill also has the unintended consequence of killing a bill that was supposed to increase due diligence standards for public officials involved in economic development projects.
The original bill, sponsored by Rep. Jay Barnes, R-Jefferson City, was born out of the failure of an artificial sweetener plant in Moberly after a China-based company had promised to bring over 600 jobs to the state.
The company, Mamtek U.S. Inc., defaulted on a $39 million dollar bond payment to the city, which has since said it will go into default. The collapse of Mamtek spurred an investigation by Missouri lawmakers into the economic development project that resulted in multiple pieces of legislation, including Barnes’, creating greater due diligence standards. Under the legislation state and local economic development officials would have to share all information regarding business seeking incentives for starting projects in the state.
The measure also would have created a rating system for the Department of Economic Development to use to evaluate the programs, while also requiring background checks for officials of start-up companies.
Even though the bill with the Senate tax credit compromise still contains the due diligence language, Barnes said he would not touch the bill if it came before the House body because he thinks the added measures exceed the scope of the bill, making it unconstitutional. Barnes did say his proposals could still be passed if the governor mandated the changes from the DED or if other vehicles for the measures were passed by the General Assembly.
Barnes also said he would continue to work on increasing due diligence standards until they were passed into law, even if it meant filing new legislation next session.