June 30, 2010
RCGA Public Policy Council Hears Range of Views on St. Louis City Earnings Tax Proposal
On June 16th the RCGA's Public Policy Council met to hear presentations on the Missouri ballot initiative regarding the St. Louis City earnings tax. If certified by the Secretary of State and passed by statewide voters in November, the initiative would mandate a vote in the City next April to retain or phase out the earnings tax. The one percent earnings tax currently generates about one-third of the City's general revenue fund.
The presenters (from left) St. Louis City Alderman Stephen
Conway; Jeff Rainford, Chief of Staff to St. Louis Mayor Francis Slay; Marc Ellinger, spokesperson for the Let Voters Decide campaign in support of the statewide initiative; and Dr. Jack Strauss, Professor of Economics at St. Louis University.
Marc Ellinger, a spokesperson for Let Voters Decide, the statewide group that is sponsoring the initiative, said that 210,000 Missourians signed petitions in support of the initiative, which is more than double the number required by the Secretary of State. The group believes that phasing out the tax would make St. Louis more attractive to businesses and residents. Representing the opposing view was Dr. Jack Strauss, Professor of Economics at St. Louis University. Dr. Strauss noted that tax policy is not one of the top
five factors in business location decisions in surveys conducted of businesses, and that earnings taxes in general have not been shown to have a negative impact on the growth of cities that have them. He also maintained that replacing the revenue stream generated by the tax would be extremely difficult, and could be much more expensive for City businesses and residents.
Jeff Rainford (pictured right), Chief of Staff to St. Louis Mayor Francis Slay, said that many issues, such as skyrocketing pension costs, perceptions about crime, aging infrastructure, lack of venture capital for entrepreneurs and intra-region competition for jobs have all had a more negative effect on the City than the existence of the earnings tax. He said
that there is no "silver bullet" to fix the region's problems, but that he appreciates civic leaders like Rex Sinquefield (sponsor of Let Voters Decide) who are promoting discussions about improving the region.
Alderman Stephen Conway, Chair of the City's Ways and Means Committee, said the quality of life in St. Louis would suffer considerably if the earnings tax were eliminated. He said the City needs the revenue to pay for vital services like fire, police and roads, and that the revenue replacement streams that have been suggested so far are unrealistic.
The Public Policy Council is currently developing a position regarding the earnings tax ballot proposal, which will then be presented to the RCGA's Board of Directors for their consideration and action. The RCGA's policy positions are designed to further its mission "to develop and sustain a world-class economy and community for the St. Louis region."
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Missouri Special
Session Called for Manufacturing Jobs Act, Pension Reform
The
Missouri Legislature began a special session on Thursday, June 24th
at the request of Governor Jay Nixon to consider passing the
Manufacturing Jobs Act (the Act) and pension reform. Both pieces of
legislation were near passage on the last day of the regular session in May, but a
last-minute compromise could not be reached between the House and Senate at the time.
Manufacturing has long
been a key component of the St. Louis regional
and state economies. The Act, which is sponsored by Rep. Jerry Nolte
(R-Gladstone) would provide essential
incentives
for auto-manufacturers and related suppliers.
If passed, the bill would give Missouri
an
important tool to compete more effectively with
other states for new
production lines and facilities. The RCGA has joined Missouri
Manufacturing Works, a coalition of businesses,
civic groups and
economic development organizations from across
of the state in support of the Act.
On Monday the Act was heard in the House Economic
Development and Job Creation Committee, chaired by
Rep. Tim Flook
(R-Liberty). The committee amended the bill by allowing the Act's incentives to be counted in the calculation of the annual "cap" on the Missouri Quality Jobs program, and also expanded the bill to include incentives for data centers. The bill was voted out of the committee 14 - 1 and debated on the
House floor on Tuesday, where it passed by vote of 125 - 19. The Senate Jobs, Economic Development and Local Government Committee, chaired by Sen. John Griesheimer (R-Washington), is scheduled to hear the bill today at 2:00 p.m.
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Special Session Info
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In a special session only topics that the Governor specifies may be considered. The issues outlined in the Governor's Call include:
- Legislation establishing an economic development program designed to support and strengthen the Missouri automobile manufacturing and supplier industry
- Legislation modernizing various aspects of the state employee retirement system and establishing additional efficiencies and oversight
To view Governor Nixon's proclamation calling for a special session click here.
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Focus on Illinois: RCGA Tours Prairie State Energy Campus
On June 24th, members of the RCGA's Energy and Environmental Council and the Leadership Council Southwestern Illinois toured the Prairie State Energy Campus near Marrissa, Illinois. The 700-acre campus is one of the largest construction sites in the United States, with 3,500 workers building a 1,600 MW power plant and opening a new coal mine. The construction activity is estimated to stimulate nearly $3 billion in
economic activity and use products and services from more than 150 local suppliers. When finished, the power plant and coal mine will employ more than 500 people and generate electricity to serve 2.5 million families in nine states. The campus is owned by eight non-profit utilities and Peabody Energy.
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RCGA
Energy and Environmental Council and Leadership Council Southwestern
Illinois members tour the Prairie State Energy Power Plant.
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Ken Bastian, Vice President of Power Operations for Prairie State Generating Company, told the tour group that construction of the power plant is nearly 50% complete with the first unit and its 800MW to begin generating power in the 4th Quarter of 2011. The second unit is scheduled to begin operations in the 3rd Quarter of 2012. Bastian noted that the power plant contains state-of the art technologies that will produce energy with 15 percent less emissions than the typical
U.S. coal plant. Environmental controls comprise 50% of the campus footprint, with the inter-connected process of boilers, precipitators and scrubbers working together to reduce nitrogen oxide and sulfur dioxide emissions (click here for a diagram of the plant 's technologies).
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Photo of Prairie State Energy Power
Plant and 700-foot cooling tower under construction. (courtesy of Prairie State Generating Company,
March, 2010)
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The environmental impact of the plant is further lessened by using coal from the next door Lively Grove coal mine, said Paul Kirvokuca, Vice President of Mining for Prairie State Generating Company. Nearly 200,000 tons of carbon dioxide will be saved each year by transporting coal from the adjacent mine instead of by rail from the Powder River Basin. The coal mine is now 60% complete. It is estimated that 6.3 million tons of coal will be used annually for the power
plant. The coal, extracted 230 feet below ground in a 35-square mile area, is expected to last for 30 years.
The RCGA thanks Sheri Bilderback (pictured right), Prairie State Generating Company
Manager of Public and Government Relations, and Janet Sabo, Administrative Assistant, for organizing this tour.
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About Prairie State
Energy Campus
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At $4 billion, PSEC is the second-largest capital project in Illinois in
the past ten years.
One of the largest power plants currently under construction in the U.S.
Will generate 1600 megawatts of power -- enough to serve 2.5 million families in nine states.
Carbon emissions will be 15% lower than the typical U.S. coal plant.
95% owned by eight non-profit, public power utilities and 5% owned by Peabody Energy, the world's largest private sector coal company.
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U.S. Senator, FCC
Chairman Visit RCGA to Discuss Federal Communications Policies
Missouri
Senator Claire McCaskill and Federal Communications Commission
Chairman Julius Genachowski met at the RCGA last Friday with a group
of regional communications business leaders to exchange ideas on national
policies regarding broadband deployment, telecommunications and
broadcasting.
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FCC
Chairman Genachowski and U.S. Senator Claire
McCaskill (D-Missouri). |
Chairman Genachowski began by explaining that all policy issues at the FCC are now being viewed in the context of four overarching concepts: investment, innovation, competition and consumers. In that regard, the FCC published a National Broadband Plan earlier this year that is aimed at helping the U.S. avoid falling further behind the pace of communications change and innovation that is now occurring in other developed countries around the world. The Plan notes that broadband is central to the mission of the FCC in the 21st century,
and is a “core platform” for economic development and job creation, as well as a core platform for addressing challenges in the fields of education, health care, energy and public safety.
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Sen. McCaskill greets
John Beck, RCGA Board Member and Senior Vice
President and Market Manager of Emmis Communications (left), and
Don Hicks, President of the Missouri Broadcasters Association (center).
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About the FCC
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Independent U.S. government agency established in 1934.
Charged with regulating interstate and international communications by radio, television, wire, satellite and cable.
Responsibilities include processing applications for licenses and other filing, analyzing complains, conducting investigations, developing and implementing regulatory programs, and participating in hearings.
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RCGA Co-Hosts Transportation Strategy Meeting with ULI and AGC of St. Louis
On June 22nd the RCGA, the Associated
General Contractors of St. Louis, and the Urban Land Institute of St.
Louis co-sponsored a transportation seminar on "Investing in the Future of the St. Louis Region." The event was headlined by Pete Rahn, Senior Vice President for HNTB and former Missouri Department of
Transportation Director, and also included a panel of regional business and governmental leaders.
Rahn (pictured below), who currently leads HNTB's national transportation practice, explained that "good infrastructure is not a natural state," but rather something that must be built and maintained. He noted that the Interstate highway system, which was built in the 1950s, was only designed to last 25 years and support 10% heavy truck traffic (56,000 pounds). Today the Interstate system is more than 50 years old and currently supports 30% truck traffic (expected to double by 2030), with 84,000 pound trucks. The
problems associated with aging infrastructure and heavy usage have taken a considerable toll on I-70, a major national artery that connects St. Louis with Kansas City. While recent improvements have been made to the highway's surface, Rahn told the audience that the bed below the road is "mush" and that the highway must be completely replaced in the next few years.
Pete
Rahn and Susan Stauder, St. Louis RCGA's Vice President of
Infrastructure and Public Policy.
The United States spends $90 billion a year on transportation infrastructure, which includes highways, bridges, public transit, and freight and passenger rail. While that sounds like a substantial amount, the National Surface Transportation Policy and Revenue Study Commission has recommended that $225 billion to $340 billion is needed annually for the next 50 years to rebuild the nation's aging infrastructure. Rebuilding I-70 in Missouri would cost $3 billion alone. Other regional projects include a $61 million
rehabilitation of the Poplar Street Bridge, a new $170 million I-64 Boone Bridge for eastbound traffic, a $60 million rehabilitation of the westbound I-70 Blanchette Bridge, and $45 million for a new Highway 47 bridge in Washington, Missouri. Rahn also addressed how to pay for such a large number of projects, saying that an increase in gasoline taxes won't work because vehicles are becoming more fuel-efficient, thus eroding the tax base. He suggested that a general tax on everyone, such as a sales tax, is the more appropriate and sustainable approach because
everyone benefits from the nation's transportation system, even if they don't drive.
The transportation seminar drew a large number of business leaders and industry stakeholders from across the St. Louis region.
East-West Gateway Interim Director Maggie Hales, who was a panelist at the event, spoke about the need for regional collaboration in setting priorities for St. Louis' infrastructure needs, as well as the difficult funding realities in the near term. The audience also heard about the importance of the ongoing statewide efforts of the Missouri Transportation Alliance (MoTA) to educate citizens on the need to develop new revenue to meet Missouri's infrastructure needs. The RCGA actively participates in MoTA, which is comprised of
community leaders, business and labor organizations, and transportation stakeholders.
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