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April 7, 2010
Proposition A
Passes by Huge Margin in St. Louis County!
With strong backing from the RCGA and the
regional business community, Proposition A, the half-cent sales
tax increase to support public transit, passed resoundingly in
St. Louis County yesterday. The margin of victory
was 63% to 37%, despite the lingering effects of the
national recession and voter concerns about the economy.
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A MetroLink train headed for Shrewsbury travels
along Forest Park Parkway. Each day more than 100,000
individuals board a Metro bus, train, or van, amounting to nearly
53 million trips a year.
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"It's
clear that the people of St. Louis County
understand just how important a
strong transit system is to the economic
vitality of our region,
and we are very grateful for their
overwhelming support. Today Metro is
starting the process of restoring service
cuts that were caused by
funding shortfalls and making progress on
its long-range plans for
service improvements. This is a
great day for St. Louis!" said Chip
Casteel, Senior Vice President - Public
Policy for the RCGA.
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Tax Credit
Proposal Causes Concern
Sweeping changes to Missouri’s existing tax
credit system have been proposed by Department of Economic
Development (DED) Director David Kerr. Kerr's plan would
eliminate the tax credit features of all existing programs and
give DED nearly unfettered discretion in allocating
incentives. While the RCGA understands the
difficulties associated with the State’s current budget crisis,
we urge the Legislature to study the significant ramifications of
such a radical plan before moving forward.
(“Tax
Credit Proposal” continued below)
Region’s Business Organizations Unite to
Defend Proven Economic Development Programs
Forward
Metro St. Louis (FMSL)—a coalition of the Regional
Chamber & Growth Association, Civic Progress, Regional
Business Council, Partners for Progress of Greater St. Charles,
and Leadership Council Southwestern Illinois—advances a unified
public policy agenda to develop and sustain a world-class economy
for the bi-state St. Louis metropolitan
region.
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FMSL’s top
priorities for Missouri are to support proven tax credit programs
that stimulate employment and leverage private investment, and to
strongly oppose all efforts to diminish the effectiveness of such
programs, including proposals to subject them to the annual
appropriations process.
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(“Tax Credit Proposal” continued
from above)
Key elements of DED’s tax credit
reform proposal:
- Elimination of all existing tax
credits except the Senior Citizens
Circuit Breaker and
Homestead Preservation.
- Creation of six new tax credit
categories (and one “at-large”
category), all
administered by DED. The combined cap on these
programs would be
approximately $314 million in FY 2011 (70% of
2009 Redemptions).
- Tax Credit Categories and
Caps/Percentages
- Affordable Housing
($31.4 million)(10%)
- Business Development
($94.2 million)(30%)
- Community Assistance
($15.7 million)(5%)
- Financial &
Insurance ($12.6 million)(4%)
- Public
Infrastructure ($18.8 million)(6%)
- Redevelopment ($78.5
million)(25%)
- At-Large ($62.8
million—subject to appropriations)(20%)
- All tax credit categories would
be discretionary.
This proposal would greatly affect how
economic incentives are awarded in Missouri, giving the DED the
power to choose which projects are approved and rejected.
This dramatic change has the potential to derail many business
and redevelopment projects where meeting the program’s
requirements now ensures that projects can move forward (so long
as they remain under the program caps). The
proposed caps, which would apply to FY 2011 Authorized credits,
would represent a 60% decrease from FY 2009 Authorization
levels. This would significantly constrain many proven
economic development tools in Missouri.
To make matters worse, a Senate amendment
has also been offered to subject all tax credits to the
appropriations process. The RCGA opposes subjecting
tax credits to the appropriations process because of the
uncertainty it would create, both in terms of timing and
outcome, which would leave Missouri out of the running compared
to more predictable incentive programs in other states.
National site selectors, businesses and investors insist on
minimizing uncertainty and risk when evaluating prospective
businesses locations, and will not choose Missouri if we leave
doubt in their minds. Using the annual
appropriations process would cause national consultants to value
Missouri’s incentives for the current year only, thus placing us
at a great disadvantage relative to other states when recruiting
new businesses.
Another concern is that over time the
political nature of the appropriations process would put
the General Assembly in the position of picking the “winners” and
“losers” among competing projects. The current
system minimizes politics and ensures projects that meet the
requirements established by the General Assembly can move forward
(so long as they are within program caps).
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The
RCGAdvocate is published periodically to inform RCGA
members and government officials about important public policy
matters at the state, federal and local levels. It seeks to
provide timely, in-depth coverage on regional issues, and, at
times, to call RCGA members to action. We welcome your comments
and suggestions.
Richard C.D. Fleming ~ President & CEO ~ (314)
444-1100 ~ dfleming@stlrcga.org
Chip Casteel
~ Senior V.P. of Public Policy ~ (314) 444-1107 ~ ccasteel@stlrcga.org
Susan Stauder ~ V.P. of Infrastructure
& Public Policy ~ (314) 444-1155 ~ sstauder@stlrcga.org
Eric
Schneider ~ Senior Director of Energy & Environment ~ (314)
444-1148 ~ eschneider@stlrcga.org
Kevin Riggs ~ Director of Illinois
Government Affairs ~ (314) 444-1108 ~ kriggs@stlrcga.org
Christine Snively ~ Director
of Government Affairs ~ (314) 444-1144 ~ csnively@stlrcga.org
Sherri Bailey ~ Executive Assistant for Public Policy ~
(314) 444-1134 ~ sbailey@stlrcga.org
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