It sounds like a pretty good deal to some—invest $240 million and get five BILLION dollars in return. But some state senators say the state might be buying into a mirage.
Tax credits are the bait on the state’s hook as it goes fishing for a Canadian aircraft maker interested in building an assembly plant at Kansas City International Airport. Sponsor Charlie Shields of St. Joseph thinks Bombardier Aerospace’s factory would use the $240 million in tax credits to create a five-billion dollar economic impact in Missouri. He says the company would build a $400 million factory at KCI that would employ 2100 people. Shields says supplier companies would employ another five thousand.
But opponents such as Matt Bartle of Lee’s Summit look at appraisals of the company’s health from some investment firms and finds recommendations that investors sell Bombardier stock. Fellow Senator Jeff Smith of St. Louis read the investment firm’s recommendations to fellow senators. The analysis says Bombardier has financial problems, has lost share of its segment of the airline market, and has a pension program that is under funded by $1.2 billion dollars.
Bartle says it’s clear the reason Bombardier wants Missouri’s tax credits is because it can’t raise funds on the capital markets as cheaply as it can get money from Missouri. "The capital markets know this is a stupid deal!" he shouts on the Senate floor.
Smith quietly agrees, "We’re the suckers."
Smith says the state has no business giving away a quarter-billion dollars in tax income at a time when it cannot afford services to tens of thousands of former Medicaid clients.
Smith and Bartle make noise but can’t muster enough opposition to keep the senate from sending the tax credit bill to the House, 24-8. The House is expected to take it up next week. Shields hopes to get word from Bombardier this summer about whether it will choose Kansas City or a site in its home country of Canada.
The bill is SS/SCS/HCS/HB2393