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May 18, 2011 - Special
Edition
2011 Missouri Session
Recap: Missed Opportunities and Modest Successes
Comprehensive Economic Development Legislation Fails
in Final Hours
The Missouri General Assembly failed to pass several
top economic development priorities during the legislative
session that ended on Friday, May 13th.
Most notably, the House and Senate could not arrive at a
compromise on an omnibus bill that would have created several
game-changing programs for our region and the state:
- Aerotropolis Trade Incentive Act
-- Would have helped leverage the St. Louis region's
central location and multi-modal transportation assets to create
an international air cargo and commercial hub at Lambert-St.
Louis International Airport by providing incentives to freight
forwarders and developers of cargo facilities. RCGA's
analysis is that the potential from this legislation is more than
10,000 jobs and $20 billion in economic activity over 15
years.
- Missouri Science and Innovation
Reinvestment Act (MOSIRA) -- Would provide a
predictable, stable source of funding for building the
entrepreneurial infrastructure necessary to support the growth of
science and innovation companies in Missouri. MOSIRA would
allow the state to capitalize on its tremendous research
capabilities through technology commercialization and high-tech
job creation without using existing state general revenue.
- Sporting events
-- Would position Missouri to compete more
effectively in the
attraction of major amateur sporting events, such
as the NCAA Final
Four, helping to boost regional tourism.
- Data centers -- Would provide
sales and use tax exemptions for creating data storage centers
and server farms in Missouri, which require large capital
investments and can aid in attracting and retaining information
technology companies.
These programs all enjoyed widespread
support throughout the state and passed each chamber by wide
margins. However, the two chambers could not come
to an agreement on the omnibus bill because of disagreements over
proposed changes to the state's existing tax credit
programs. It has always
been the RCGA's position that these economic
development tools generate more revenue for the state than they
use by leveraging private
investment and creating quality jobs for thousands of
Missourians.
However, after the Governor's Tax Credit
Review Commission (TCRC) issued its recommendations last year, it
has become clear that no new economic development programs -- no
matter how beneficial or important to the future of Missouri --
will be approved by the Senate without being accompanied by
changes to existing tax credit programs.
Many of the changes recommended by the TCRC were
inserted into the Senate's version of the omnibus economic
development bill, including near-term sunsets and significantly
lower caps for the Historic Preservation and Low Income Housing
programs. In response, the House agreed to reduce the
program caps and implement 10-year sunsets, but the two chambers
could not resolve their differences before the session
ended. The bottom line is no new economic
development programs and no changes to the current tax credit
programs.
Fix the
Six
The "Fix the Six" business coalition
priorities fared somewhat better than the economic development
proposals, with the General Assembly passing two very important
proposals:
- Elimination of the Corporate Franchise
Tax -- The bill, signed by Governor Nixon, will phase
out this antiquated tax on businesses over a five-year period.
- Employment Law Reform -- This
bill would have restored balance to the state's employment laws
by limiting the individual liability of supervisors, mirroring
the federal standard of proof in discrimination cases, tightening
whistleblower protections, and implementing reasonable damage
caps -- but unfortunately it was vetoed by Governor Nixon.
Four "Fix the Six" initiatives that were not
successful this session include workers' compensation
reform of co-employee liability and occupational disease
claims, removing the escalator on the state's minimum
wage, joint and several liability tort
reform, and an extension of bonding terms to repay money
borrowed from the federal government for unemployment
insurance claims.
Other Business Issues
The General Assembly also passed two other
measures that are of benefit to Missouri businesses:
- Unemployment Insurance -- The
legislature agreed to accept $105 million from the federal
government to temporarily extend unemployment benefits from 79
weeks to 99 weeks in exchange for a reduction in the number of
weeks for state unemployment benefits from 26 weeks to 20 weeks,
which will allow businesses to save some $108 annually going
forward. An additional fraud prevention measure for
unemployment benefits will save an additional $16 million.
This bill has been signed by Governor Nixon.
- Water Fee Extension -- The
legislature also passed a bill to reauthorize the Missouri
Department of Natural Resources' water fee program until
September 2013. The program, which allowed Missouri
businesses to pay water fees to discharge waste and storm water,
had expired in December 2010, causing many to fear that the
federal Environmental Protection Agency would take over these
regulations.
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