The potential closure of the Claycomo Ford Plant, and with it the loss of about 3,700 manufacturing jobs, was the main thrust behind last year’s Missouri Manufacturing Jobs Act.

The act allows a manufacturing business to retain all or part of the withholdings taxes they normally remit to the state.  I think I got the wording right – your eyes are supposed to glaze over at words like “withholding” and “remit.”  Here’s a better way to say it: The company will collect state tax from its employees, and instead of sending that money to the state, they will keep it.

To keep those 3,700 jobs and convince Ford to keep investing in the Claycomo plant, legislators passed $150 million worth of incentives. There isn’t even a mandate to create new jobs in this package – which to me says that the main function of this bill is simply to not lose jobs at this particular plant.

This bill was arduously pooped popped out late last session, paid for by a new requirement that public-sector employees contribute part of their paychecks toward the pension fund.

From the AP and Columbia Missourian:

“Over 10 years, the automaker incentives could cost Missouri $150 million. The pension changes could save a projected $659 million over the next decade for three of Missouri’s main retirement systems. It would require state employees hired after January 2011 to contribute 4 percent of their paychecks toward the pension fund, delay their standard retirement age and require them to work longer to gain eligibility for a pension.”

In other words, a plan to shore up pension funds has been raided before it even begins.

In January 2011, there were 287,200 people unemployed, and while we’ve been shaving off decimal places for the last several months, it’s concerning that the major action of last year was so narrowly focused, and created such a patchwork of perverse incentives.

The message is pretty clear: Manufacturing jobs at Claycomo Ford are more important than other jobs.  Just in the last couple of years, Missouri has lost several thousand jobs from the closures of a Ford plant in Hazelwood and two Chrysler plants in Fenton – and there are dozens of other industries experiencing significant job loss.

Ford had to do little more than float a rumor (its veracity unknown) that they would move jobs to Louisville, Ky., and $150 million lands in their laps.  I’ve threatened to move to out of state before, and … nothing!  People don’t get these kinds of deals, but we do pay for them through diminished services or increased taxes.

This time, public employees lost out.  I think some of the changes they’ve made to public pensions were a good idea, but to marry those reforms to shelling out tax incentives is just plain weird.

Giving away $150 million at the mere whisper of losing jobs is enough of a barometer for me to see that a) Missouri is practically hogtied on the negotiating table, and b) the individual taxpayer is taking the brunt of the consequences. Without an income tax, though, we’d have a natural advantage, and the incentive to locate and keep jobs in Missouri would apply to everyone and not play favorites.  It’s time we started thinking of tax reform as our best economic development tool.