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House passes proposed ceasefire in jobs ‘border war’ with Kansas

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The state House has passed its version of a bill proposing a cease-fire in the so-called “Border War” over jobs with Kansas.

The proposal sponsored by House Speaker Tim Jones (R-Eureka) would restrict the use of certain incentive programs for businesses that move from four counties in Kansas across the border to any of four counties in Missouri. It would only be enacted if the state of Kansas adopts and maintains a similar policy regarding businesses that move from those Missouri Counties into Kansas.

The legislation is HB 1646.

Representative Kevin McManus (D-Kansas City) says this is the year for Missouri and Kansas to reach such an agreement.

“We’re winning this war but we can’t afford to keep it going at this rate and neither can Kansas,” says McManus, “and I think that latter part is even more important to recognize. With the changes that Kansas has undergone, they cannot afford to keep this going and they recognize it. So there’s leverage there. We have to use it.”

Jones says the economic development effort needs to be less about state versus state and more about the region versus the rest of the world.

“We’re holding out the olive branch and saying, ‘Let’s stop playing this economic small ball. Let’s create a business climate in the region that attracts more jobs back to the United States, back to the Midwest.”

The Senate has passed its own version of that legislation, sponsored by Senator Ryan Silvey (R-Kansas City).

House Speaker on special session, Missouri’s chances of landing new Boeing airline assembly (AUDIO)

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Missouri’s House Speaker says Governor Jay Nixon has submitted to the General Assembly a draft of legislation he wants it to consider in the special session he has called that will begin Monday. He has asked the legislature to approve raising caps on four economic development programs in an effort to get Boeing to build its next airliner in St. Louis County.

House Speaker Tim Jones (left) and Governor Jay Nixon.

House Speaker Tim Jones (left) and Governor Jay Nixon.

House Speaker Tim Jones (R-Eureka) says he and other lawmakers had asked Nixon to supply them with a blueprint to work with.

Jones tells Missourinet, “We told him that given the immediacy of the timeline, the short timeframe in which to consider this before the December 10 RFP deadline, the fact that he has been the one that has been in the direct negotiations with the Boeing upper management, that he is in the best position to lead on this issue and to describe to us how Missouri can be in the best place to be considered for this contract.”

Jones says he has only seen a draft of the proposal. He believes Nixon has agreed to meet with his caucus Monday afternoon before the special session begins.

“I need to have the Governor come and explain the entire opportunity to my caucus and why he needs this legislation in the first place,” Jones says.”

House Republicans were already scheduled to be at the Capitol Monday for a winter caucus.

The Governor has asked lawmakers to raise caps to allow for up to $150-million annually for large-scale aerospace projects under Missouri Works, Missouri Works training, Missouri BUILD and the Real Property Tax Increment Allocation Redevelopment Act. Jones says under the Governor’s proposal, if Missouri is not awarded the new Boeing project, no state incentives or money would be awarded.

The special session begins Monday afternoon at 4 and Missouri must have a proposal ready for Boeing by December 10. Asked whether that is enough time for legislative action, Jones says, “Mathematically there is probably enough time. Logistically that is going to yet be determined.”

Often each chamber of the legislature will address an issue with its own version of a bill. Both of those could then go through the respective chambers’ committee processes and be passed out of each chamber before differences are hammered out between the two versions.

Jones says the only chance for success before December 10 will be for one chamber to start out with a bill.

“We have not decided which chamber that’s going to begin in yet. That’s a discussion we are still having with Senate leadership.”

Jones says he hasn’t read the Governor’s call for a special session to see whether it is too narrow for other issues to be introduced, but he doesn’t want anything else to be introduced.

“Given the extremely compressed timeframe of … we’re talking a total of less than 10 calendar days, which is far less business days … for an extremely important multi-billion dollar opportunity, I think we should stay focused on the task at hand and the call at hand,” Jones says. “However I understand that with 196 other legislators who will be participating in this process it is probably safe to say that some of those individuals will want to raise other issues.”

Jones says it will be up to leadership in each chamber whether to agree to allow work on other things, but he reiterates he wants to stick to the Boeing incentive issue.

He says the State of Washington lost the 777x project because of its tax and labor policies and conflicts between Boeing and labor unions there. He says Missouri’s own policies will factor into whether it lands the project.

“There are some states being considered that are right-to-work states or that have better relationships with their unions (than Washington). Other states that are being considered have better tax structures (than Washington) … We’re going to probably be in some pretty stiff competition with states that have good policies in those areas.”

Jones and other Republicans are questioning the Governor’s support of an incentive package to bring Boeing to Missouri after rejecting tax cut legislation that the General Assembly failed to override his veto of, in the veto session in September.

“Our Governor decided that he would veto a policy that would give a tax break to all Missouri families, farmers and small businesses. He didn’t feel that such a tax break was appropriate at that time so one of the questions that’s going to have to be answered is, ‘Why is a tax break for this project appropriate at this time?'”

Hear Mike Lear’s interview with Tim Jones (10:27):

House advances two proposals related to Mamtek (AUDIO)

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Two pieces of legislation have advanced in the House that stem from what has been learned about the failure of the Mamtek sugar refinery project in Moberly. Both were offered by the representative who chaired the committee that studied that deal, Jay Barnes (R-Jefferson City).

Representative Jay Barnes (photo courtesy, Missouri House Communications)

One is an amendment to HB 1455, which changes the Manufacturing Jobs Act. The other is a stand-alone bill, HB 1865. There are differences between the two, but some key provisions are found in both. They would require up-front verification of financial information by start-up companies applying for incentives, the sharing of “adverse” information received about a company and the creation by the Economic Development Department of a rating system for proposed projects. Barnes says he wanted to offer both so that the language has two opportunities to become law.

The proposals met with some opposition, especially from lawmakers who say they’ve heard from economic developers in their districts that the language goes too far. Barnes disagrees, “What my fear is, is that we haven’t gone far enough. There are a lot of other provisions our committee decided not to put forward because we wanted to put forth a proposal that should have overwhelming support from a body that generally supports protecting taxpayers. What we have is not as long as I’d like it to be.”

One of those who opposed the bill is Representative Denny Hoskins (R-Warrensburg). Of the provision that “adverse” information about a company should be shared, he said, “It seems like a big judgement call for these economic development corporations, also the Department of Economic Development, to determine what is ‘adverse’ and what is not ‘adverse.’ This might mean that all the companies would have to disclose all the information, and therefore be to the detriment of economic development in the state of Missouri.”

The representative whose district includes Moberly, Randy Asbury (R-Higbee), opposes the proposals. “As I read this legislation I’m unconvinced the outcome would have been any different had this new layer of beaurocracy been in place prior to Mamtek’s debut.”

Asbury disputes the requirement that start-up companies provide verification of financial information. “Just because we request financial verification for start-up companies does not mean anyone at any agency is qualified to make a better decision based on that information.” Mamtek provided a financial statement saying it had $7.2 million in cash or equivalent, but that was never verified by a third-party.

Both pieces of legislation can advance to the Senate on another positive vote. Both are likely to be voted on today.

AUDIO:  Representative Jay Barnes presents his amendment to HB 1455

Governor-backed auto industry incentives introduced

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The automotive industry incentive component of the Governor’s job creation strategy has found its backers in the House and Senate, and they come from both sides of the political aisle.
 
In his State of the State Address and stops around the state, Governor Jay Nixon has promoted his Missouri Works plan. It would expand on the provisions of the Missouri Manufacturing Jobs act of 2010, which helped promote expansion at Ford’s Claycomo Plant in Kansas City and General Motors’ plant in Wentzville. Legislation introduced this week basically targets those incentives at manufactures in the automotive industry.
 

Representative Chuck Gatschenberger (R-Lake St. Louis) is sponsoring HB 1455.

The House version, HB 1455, will be carried by Representative Chuck Gatschenberger (R-Lake St. Louis). He says, “Those manufacturers of vehicles … they need brakes, they need windshields, they need trim, they need engines … and not all of those are built right there on that spot.”

Parts makers qualify under the proposal if the products they make are used by an automaker. Companies with at least half of their sales coming from parts used to modify vehicles can also qualify for incentives.

Gatschenberger says it offers two options to those companies. “One is if you employee five employees, you’re gonna get the same benefits with withholding the taxes that you pay from the state for the benefit of the company. The other aspect of it … there’s a lot of companies in this state that are not going to be able to employ five people but they can employ two people. If they do two people and $100,000 of investment in their business, they can fall under the same guidelines.”

Gatschenberger says it also includes some clawback provisions.  “Let’s say they have those two people but they lay two other people off. Then they lose the benefit. It’s not the specific people that they hire, it’s the total number of people.”

See the Governor’s Office’s release on the introduction of the legislation.

The package increases the standard incentive period to five years, from the three found in the 2010 language. Companies would get a tax break equaling 5 percent of their new payroll if wages are at the average for the county, 5.5 percent for wages that are 120 percent of that average and 6 percent for wages at least 140 percent of the county average.

Senator Kevin Engler (R-Farmington) is the sponsor of SB 691.

Gatschenberger notes the package opens up incentives to all auto manufacturers, not just Ford and General Motors, “So if Nissan thinks, ‘Hmm, we might want to put a plant somewhere but where are we going to put a plant,’ it’s making the carrot bigger and jucier.”

The Governor’s Office says the package boasts a lengthy list of bipartisan supporters. Also in the House are Speaker Steven Tilley (R-Perryville), Majority Floor Leader Tim Jones (R-Eureka), Jerry Nolte (R-Gladstone), Minority Leader Mike Talboy (D-Kansas City), Assistant Minority Floor Leader Tishaura Jones (D-St. Louis), Minority Whip Mike Colona (D-St. Louis), Representative Stephen Webber (D-Columbia) and Representative Bert Atkins (D-Florrisant). Senator Kevin Engler (R-Farmington) is sponsoring the Senate version, SB 691 with Minority Floor Leader Senator Victor Callahan (D-Independence) a co-sponsor.

Top House democrat wants new DED offerings

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The Minority Leader in the Missouri House of Representatives says rather than focus only on ideas that have already been vetted, the legislature needs to consider some fresh ideas.

State Representative Mike Talboy (D-Kansas City)

Mike Talboy (D-Kansas City) points to the states neighboring Missouri, all of which he says have angel investment opportunities. Those could be tax credit programs or funds that are typically smaller than some of the economic development programs already in Missouri.

He says putting programs like that into effect can provide “good bang for your buck in the beginning. But then also as the budget years get better and as we have more revenue in the state and as we see the returns on those types of programs, then you can look at expanding them if you need to or be able to expand them into different parts of the state.” Talboy says there is nothing like what he is talking about currently offered by DED.

Talboy says just having some new tools for economic development can spur some important discussions by stirring discussion that might not happen without them. “It allows tangentially some of these ideas to come out of those conversations that are new that we don’t have…you see some of these new ideas sprout up from those conversations.”

The Department of Economic Development has come under scrutiny by lawmakers investigating a failed project to bring a sucralose plant to Moberly. Talboy says that should not have any impact on discussion of new incentives that department might offer. “Whether or not they’re a good program…I don’t think depends on the conversations and whether people have an issue with department or another. I think that if the program’s worthwhile we’ll find a way to make sure that it gets done. If people have objections to certain departments, we’ll deal with those separately.”

The new legislative session begins tomorrow.