Here’s a plan to improve Missouri’s economy: cut help for disabled renters and help in paying property taxes for low income elderly homeowners. Give that money to Paul McKee and other rich developers in the form of tax breaks for Aerotropolis. That’s what the legislature is about to do, as Ben Marten of Missourians for Tax Justice explains:
In September, Missouri lawmakers are expected to reconvene for a special session aimed at passing a jobs creation package to promote economic development. Legislation that increases corporate tax exemptions and general business incentives, though deeply flawed as policy, isn’t a novel concept. Yet, leaders in Jefferson City are expected to do more than simply give money to corporations: lawmakers are actually planning to pay for these giveaways by revoking property tax credits for elderly and disabled renters.
The Associated Press reports that the legislation “would authorize tax breaks to attract international shippers to Lambert-St. Louis International Airport…. It also would create incentives for science and technology companies, computer-based data storage centers and big-time amateur sporting events. And it would revamp existing programs so Missouri could offer incentives to retain companies being enticed by other states – a provision particularly intended counteract Kansas’ efforts to lure companies from Kansas City, Mo.”
Of course, there is little evidence that these giveaways will actually produce jobs for Missourians, or expedite business decisions to expand in the Show Me State.
One reason to object to these tax credits is that they play into the the ongoing hustle of corporations pitting one state against another (not to mention one municipality against another). Even more compelling is that on this rare occasion Jeanette Mott Oxford, champion in our state lege of a fairer tax system, finds herself agreeing with Sinquefield’s Show Me Institute. Both regard these credits as political cronyism. SMI advises legislators not to take at face value claims that the bill will further economic development or create jobs:
The structure of the incentives laid out in the Aerotropolis legislation do not advance Missouri’s economic interests because a vast majority of the incentives are tailored to advance the financial interests of a small group of businesses and private developers,at the expense of pre-existing businesses and state taxpayers.
The Aerotropolis tax credits would subsidize warehouse construction, as well as cargo flights from Saint Louis to international destinations. Up to $300 million in tax credits – more than 80 percent of the bill’s tax breaks – would be made available for the construction of new warehouses around the airport. Those tax credits could be used to pay up to 30 percent of a warehouse owner’s demolition, construction, and equipment costs. The bill requires that warehouses qualifying for those incentives must be built on 100 contiguous acres of land or in specially designated areas. There does not seem to be any practical reason for the “100 acre” requirement contained within the Aerotropolis tax credit bill. The requirement seems to serve only to restrict who could draw upon such tax credits, narrowing the field to a small pool of large-scale developers. Such a strange requirement is not unexpected, but it is an unfortunate example of the cronyism that can flourish almost hidden in the details of a lengthy bill.
Furthermore, although Aerotropolis proponents cite increased international trade as the reason to create hundreds of millions in subsidies, the bill would allow warehouse owners that do not process any international cargo to draw upon the tax credits.
I’d say something snarky about what happens when Republicans finally tackle a jobs bill, except that I can’t even lay this one entirely at their door. St. Louis Mayor Slay, St. Louis County Executive Charlie Dooley, and Governor Nixon have been pushing this hard. Aerotropolis ought to create jobs building warehouses and transporting cheap Chinese made American flags. Do Democrats justify cutting the circuit breaker program as a tradeoff for those jobs? Maybe, but it don’t seem right to me.