JEFFERSON CITY • The Missouri Legislature kicked off a special session Tuesday that Republican legislative leaders hope will provide a quick makeover for the state's job incentives. But before the first vote was taken, there were signs that the compromise they had crafted was unraveling.
Stung by charges that the GOP's package would unfairly hit the poor, the bill's sponsor readied an alternative aimed at spreading tax credit cutbacks more equally among low-income residents and developers.
"Republicans are always portrayed as taking from the poor and giving to the rich, and we didn't want to do that," said the sponsor, Sen. Chuck Purgason, R-Caulfield.
But Purgason's proposed changes could spell trouble for the bill. To provide money for new programs such as an Aerotropolis tax credit designed to attract Chinese cargo shipments to Lambert-St. Louis International Airport, he would make deeper cuts in two development subsidies supported by House leaders. A similar showdown last spring killed the economic development legislation.
Senate President Pro Tem Rob Mayer, R-Dexter, and House Speaker Steve Tilley, R-Perryville, announced in July that they had forged a tax credit compromise and wanted Democratic Gov. Jay Nixon to call them into special session. Nixon did so last month.
But as legislators assembled for the long-awaited opening on Tuesday, it was unclear how broadly that consensus extends.
Senators used a routine session to talk for three hours about whether they should even convene. Most of that time was taken up by Sen. Jason Crowell, R-Cape Girardeau, who blasted Aerotropolis as "Errortropolis" and accused Nixon of imposing "noose-like parameters" on the session.
Nixon wants legislators to scale back subsidies he deems inefficient and replace them with tools that create jobs. The centerpiece is a $360 million package aimed at turning Lambert into a hub for freight flown between China and the Midwest.
Other new programs would be geared to attracting technology businesses, data warehouses and amateur sports tournaments.
To pay for such ventures, Missouri would trim or eliminate several tax credits, such as one that goes to about 100,000 low-income elderly and disabled people who rent their homes.
Taxpayers claim the credit on a sliding scale, based on income and how much they paid in rent. The maximum credit is $750. To be eligible, a person who rents a home can make no more than $27,500; couples can make up to $29,500.
Legislators who want to eliminate it say the credit was intended to help homeowners on fixed incomes cope with skyrocketing property taxes. Axing the subsidy for renters would save the state an estimated $57 million a year, more than any other proposed tax credit cutback in the GOP leadership's bill.
The proposal came from a commission appointed by Nixon. The credit "doesn't really do anything" to make units more available to low-income people, said Tax Credit Review Commission Co-Chairman Chuck Gross. "It's just an arbitrary number. Therefore, it's not really a credit for property taxes paid."
The governor, who initially balked at eliminating the renters' credit, now says he is on board.
But the plan has drawn fire from a diverse array of legislators and groups, ranging from conservative anti-tax advocates to liberal groups that press for policies to aid people in poverty. They are circulating lists showing how many people in each legislative district use the subsidy.
"Hopefully, the legislators are starting to understand that this has kind of broad support," said Amy Blouin, who lobbies for the Missouri Budget Project, a liberal-leaning group.
Hortense Moore of St. Ann says the credit helped her pay utility bills and put food on the table — "just everyday things."
"It helps you so you can keep your household going," said Moore, a former firefighter who is on disability. She said legislators "forget what's going on with poor people. It's like, they haven't lived this life."
Brenda Procter, a University of Missouri extension specialist in personal financial planning, sees the impact of the credit when she volunteers to help low-income families do their taxes.
Procter recalls telling one woman she could expect a $600 credit. The woman's stove had broken and she was relying on a borrowed camp stove to cook her food.
"She almost crushed me with a hug," Procter said. "She said, 'Oh, my God, I can buy a stove.' We're not talking about people going out and buying fancy clothes."
Purgason's new version of the bill wouldn't preserve the credit, but it would phase it out over six years instead of ending it all at once. He said his goal was to split the budget pain equally between the renters' credit and business-oriented subsidies.
Toward that end, he would gradually reduce the credits available for low-income housing developers and historic preservation, so that after several years, each program would be guaranteed $50 million.
Legislators could appropriate more money to those programs but instead of being locked in, they would "be in competition with things like higher education, (elementary and secondary) education and other essential services," Purgason said.
Wendy Timm, president of the Missouri Growth Association, a commercial real estate trade group, said she hadn't yet read the proposal and didn't want to jump to conclusions. But on the surface, she said, it sounded like too deep a cut.
"If there's no way to tie the appropriations to (state) revenue, I'd say it's just way too much of a shock to the pipeline," she said. "(At $50 million) there're too many deals that won't be able to get done."
Purgason's bill also would change the Aerotropolis proposal, which includes money for warehouses to hold Chinese goods in "gateway zones" near the airport. Purgason would tie such subsidies to actual jobs created by putting the initiative under the state's Quality Jobs program.
Even if a Senate committee recommends the leadership's version of the bill, Purgason said he will offer his alternative during floor debate. He contended it provides the best way to get past a potential Senate filibuster, which could jeopardize everything on the table — including an unrelated bill giving St. Louis control of its Police Department for the first time since the Civil War.
Nixon included the police measure — a longtime priority of St. Louis Mayor Francis Slay — in the special session. Other agenda items include moving the presidential primary date to March from February and repealing a new law that could have barred teachers from contacting students through social media such as Facebook.