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Business Tax Breaks Rejected by the House

September 19, 1997
By: David Grebe
State Capital Bureau
See the House roll call and Senate roll call.

JEFFERSON CITY - Missouri's House meets again Friday in another effort to pass a package of tax breaks for developers after Thursday's surprise defeat of the administration's economic development bill.

Both the House Speaker and the governor's chief of staff conceded after the initial House vote they were unsure whether they could round up the votes for passage on Friday.

The measure fell six votes short of the number needed for passage -- but with 39 members not voting. Several House members had left as extended Senate debate earlier in the day delayed House action until the early evening hours.

The bill includes tax credits for historic preservation, creates the St. Louis and Kansas City Regional Sports Authorities, enterprise zones in St. Louis City and Clinton, and changes to the state's tax increment financing laws.

Tax increment financing (or TIF) allows localities to help finance development projects by issuing bonds. Those bonds are then paid off by the additional taxes generated by the project.

Lobbyists huddled outside the chamber as opponents of the bill repeatedly claimed it was a giveaway to special interests.

Earlier in the day, the measure won Senate approval, but with not one vote to spare.

Sen. Marvin Singleton, R-Newton County, said his constituents had no need for the bill. He said, "they need more corporate welfare like my dog needs more ticks."

Criticism also arose about the potential for TIF money to be used to subsidize gaming facilities.

While the bill specifically excludes casinos from receiving TIF funds, legislators argued that funding for projects tied to casinos was possible.

Additional controversy developed later in the House when several members of the Black Caucus questioned why funding had been removed from a jobs-training program for inner-city residents.

Rep. Mary Bland, D-Kansas City, said "I'm concerned that things that were in there are no longer there."

The governor's staff moved quickly to assure members that money for the jobs scheme would be found out of presently available funds.

Gov. Mel Carnahan vetoed an earlier version passed during the regular session, citing inadequate controls of TIF district use of state tax money.

Henry Rizzo, D-Kansas City, who sponsored the bill in the House, said the process has been difficult.

Rizzo said, "I'm real frustrated, but I think it will pass."