The House and Senate have officially begun the special session called by Governor Jay Nixon. There are a few things that should happen in the special session but not most of the ones for which it was called.
Yesterday, the St Louis Post Dispatch listed a summary of the items to be considered during the special session. While it glosses over some of the points within the various items, it is a good summary:
• Aerotropolis package of $360 million in tax credits to promote development tied to a China air hub
• Missouri Science and Innovation Reinvestment Act, which would create incentives to boost science and technology
• Compete Missouri Initiative, a range of business incentives
• Incentives to lure high-tech data warehouses
• Tax credit reform, based on the work of the Bipartisan Tax Credit Review Commission
• Tax amnesty
• Moving Missouri’s presidential primary to the first Tuesday after the first Monday in March
• Local control of the St. Louis Police Department
• Authorizing tax credits to help attract amateur sporting events to Missouri.
• Revising “Facebook law” barring social media contact between teachers and students
Here is a look at some of the items contained in the call.
Let’s dispose of the easiest one first. It’s my understanding that the Governor has not officially added the “Facebook law” to his call. He said something about wanting it “repealed” but if he adds it to the special session, he can’t limit the legislature to just the repeal. They can in fact amend it as Senator Jane Cunningham wants to do.
The 800 pound gorilla of the session is the Aerotropolis package or China Hub. The proposal would grant a tax credit over 10 years of $360 million to promote development of warehousing and shipping facilities in support of cargo flights from China. The Show-Me Institute has written extensively about the excess of empty warehouse and other issues regarding this proposal.
Many groups on the left and right oppose this. In fact, the K&N Patriots are having a rolling tea party the next couple of days at the Capitol. If interested, you can find more information here.
Our blog post, The Fallacy of Government “Job Creation ” Bills details why tax credits such as Aerotropolis are the wrong approach to fixing “economic” problems. If the members of the General Assembly are paying attention to their constituents, they will not move very quickly to approve this proposal.
In order to afford the Aerotropolis tax credit, the General Assembly will have to make some changes to existing tax credit programs which is covered in the Governor’s call under “Tax credit reform, based on the work of the Bipartisan Tax Credit Review Commission”. It is an opportunity to make some real reform but for the most part, that opportunity is going to be mostly wasted aside from some caps and sunsets being placed on some of the tax credits.
Understand that many of the existing tax credits have lobbyists attached to them. Therefore it’s no surprise that the biggest dollar impact being discussed for elimination is a portion of the tax credit commonly known as Senior Circuit Breaker tax credit that goes to qualifying seniors who receive a refund of portion of their property taxes they pay either directly or through their rent.
Why is it no surprise? There are no high dollar lobbyist associated with protecting the Senior Circuit Breaker program. The proposal to help fund the Aerotropolis will take most of the money from the Senior Circuit Breaker and redistribute it. It is true that once this approach was exposed, some of the General Assembly have said that they will add provisions for this money to be used for other “senior” programs. Problem with that is those “reserved” funds can easily be re-directed no matter what is said they will be used for during debate.
The only thing that really needs to be addressed in the Governor’s call for special session is returning Local Control of their police department to the taxpayers of St Louis City. The Civil War which was used as the “excuse” to take over the City’s police department has been over for 146 years.
Some believe that St Louis has a lot of problems that should be corrected before they get their police department back. I understand what is being said but there is no excuse for the fact that the people who are paying for the police department don’t have direct control of it through their elected officials. If there are problems in St Louis, it’s up to the citizens to fix them.
All in all out the special session is not very special.