The House Committee that last year dug into the failed Mamtek deal at Moberly will now turn its attention to one of the incentive programs administered by the Department of Economic Development.
Representative Jay Barnes (R-Jefferson City) says work by the Committee on Government Oversight and Accountability last year, and a report by the State Auditor’s Office, say the Quality Jobs Program could be oversold and under-performing. Barnes chairs that committee.
He says the Auditor reported two things. “They first is that they had lax oversight and the second was that the program did not deliver as advertised on the front end … that there were a lot of ballyhooed press announcements and press releases on the front end but then when you came back a year or two years or three years later, there weren’t any jobs created. I think when you look at the record of massive announcements like in Mamtek what you find is a string of epic failures.”
The Committee in January announced it had reviewed a list of 91 projects that received more than $1 million in state incentives in the past six years. Those projects reported creating only about a fourth of the more than 20,000 jobs they projected. Among them, Mamtek had been awarded $7.6 million in Missouri Quality Jobs Program tax credits and produced no lasting jobs. Barnes said at the time that raised questions about the performance of Quality Jobs.
Barnes says as Governor Jay Nixon calls back together his Bi-Partisan Tax Credit Review Commission, and as some state senators push again for tax credit reform, the Quality Jobs Act has not been brought up.
“If it’s worth looking at tax credits, it’s worth looking at all of the tax credits, even those favored by politicians and the powerful.”
Barnes is critical of the Governor’s tax credit review commission, saying it failed to look into Quality Jobs in its initial review and lacks any active state legislators. He says the group was not interested in asking difficult questions about the program.
Barnes expects the Committee to begin where it left off. “I simply asked for that list to be updated, and then we start hearing testimony on whether an employer being able to keep the withholding taxes from new hires for a short window of time is actually a sufficient incentive to have employers create new jobs, or whether its, ‘Hey, we’re going to create new jobs. How much money can we get from taxpayers on top of what we’re already going to do?’”
Barnes issued this statement:
“More than a year after the Mamtek disaster, the Department of Economic Development chugs along with Quality Jobs Act authorizations accompanied by other public benefits and often high-profile press conferences. Unfortunately, recent reviews of the Act have shown that it may be oversold and under-performed.
“Last year, an investigation by the House Committee on Government Oversight and Accountability revealed that five out of every six Quality Jobs Act authorizations failed to deliver as promised and only about one in four jobs promised under the Act have actually been realized. Following our investigation, Missouri Auditor Tom Schweich released a blistering audit of the program, concluding, as our committee did, that (1) the number of jobs created has been vastly overstated; and (2) the Department of Economic Development conducted inadequate oversight of the program.
“In the past few weeks, both Missouri Senate leaders and Governor Nixon have announced intentions to consider thorough tax credit reform in the next legislative session. Governor Nixon recently announced the re-formation of his Tax Credit Review Commission, a group of 27 people hand-picked by the governor that does not include a single active legislator. Unfortunately, the Governor’s Tax Credit Review Commission failed to make any investigation into whether the Quality Jobs Act was delivering as promised. From the Committee’s 2010 report, it is apparent they were not interesting in asking difficult questions about the program’s efficacy.
“Missouri taxpayers deserve better. They deserve elected leaders willing to look at all tax credits for potential reform – even those favored by the powerful and politicians who like using them to claim false credit for “creating jobs.” The House Committee on Government Oversight and Accountability will go where the Governor’s Tax Credit Review Commission didn’t and won’t.”