State jobs bill fails in legislative session

When the Missouri Legislature adjourned May 12, lawmakers went home without passing a bill to overhaul state job creation efforts.

The failure of the bill, which became embroiled in the political tug-of-war that halted almost all action in the Missouri Senate, could mean the state loses a chance to land almost 8,000 jobs, supporters said.

The biggest loss was a plan to expand the Quality Jobs program of tax credits, said Mike Mills, deputy director of the Department of Economic Development.

The bill would have doubled, from $12 million to $24 million, the amount of tax credits available to businesses that add a target number of new jobs, pay wages above average for the county and provide health-insurance benefits.

"The program has been a phenomenal recruiting tool for technology jobs," Mills said.

When the bill left the Missouri Senate, it was 13 pages granting two sales tax exemptions, including one that would take the tax off large trucks used to haul goods within the state's boundaries. When it returned, the measure had grown to 166 pages with business tax incentives estimated to total as much as $200 million over the next three years.

During negotiations between the chambers, the costs and exemptions were pared back, but the loss of some provisions led to a filibuster threat from Sen. Jason Crowell, R-Cape Girardeau.

Crowell was upset because a provision he wanted, to give a sales tax exemption for energy consumed by Procter & Gamble at its plant on Highway 177, had been stripped from the bill. The exemption would have saved the paper products plant $154,000 a year in taxes, Crowell said.

"All session long, I had worked with Procter & Gamble, both on the local level and the corporate level, for a tax abatement for utility costs," Crowell said.

The local plant competes with a similar Procter & Gamble plant in Wisconsin, where the utility costs are already exempt from sales tax, Crowell said.

The average pay at Procter & Gamble is $42,000 a year, he said. A sales tax exemption, he said, makes the local plant as attractive as the one in Wisconsin when decisions are made about where to make particular products, Crowell said.

"I will fight like the dickens to help Procter & Gamble remain competitive," Crowell said.

Crowell's filibuster threat shelved the bill on May 11. In private discussions, Crowell was convinced to put his objections aside, said Sen. Gary Nodler, R-Joplin, and sponsor of the measure.

But by the time Nodler got a chance to push the bill again on May 12, politics intervened. The Republican Senate majority had muscled through a bill requiring voters to show a photo ID card in order to cast a ballot, angering Democrats and producing a backlash that stalled almost all Senate action.

"Obviously it is going to delay progress for the state of Missouri until we can get some of these provisions passed," Nodler said.

In addition to the specific exemptions targeted for single businesses or industries, the measure included numerous changes designed to revamp state job creation efforts.

Those changes included eliminating some incentive programs, expanding others and beginning new efforts.

Two new proposals lost when the bill failed were the Youth Jobs Pilot Program and the Missouri Economic Development Code, which authorized local job creation boards in each county and city and specified what the local boards would consider in a development plan.

"All the changes in the different programs, including consolidation and caps" on tax incentives "were part of what the governor challenged the department to do," Mills said. "We had some 30-year-old tax incentive programs and we asked how we become more efficient, more effective in our efforts."

The bills size became part of the problem, Mills noted. "This bill became a very, very large and cumbersome economic development package. It had a lot of good things, and it had its share of special interest provisions above and beyond the core of the package."

Every complicated bill passed by lawmakers requires time for state agencies to implement. And while Mills said there were some employers waiting to make a decision on locating jobs based on whether the bill passed, he wouldn't reveal which projects may be scuttled because it failed.

The department can't discuss efforts to attract individual industries without betraying the confidentiality of the negotiations, Mills said.

"It is definitely a competitive game, competing with other states and globally for jobs," Mills said. "As we finish deals that are currently active and collect deals over the next few months, we will definitely see opportunities lost or at the very least hampered."

Nodler said he had been given one estimate that as many as 8,000 jobs will be lost in the next year because the bill failed.

The defeat of the measure doesn't mean the ideas included in the bill are dead, Mills said. The bill seemed to have strong support, and he expects lawmakers to revisit the measure next year.

"This was a bill that was coming together in the final days of the legislative session and seemed to have a great chance," he said.

rkeller@semissourian.com

335-6611, extension 126