Category: Missouri Legislature

by Christian Frommelt

Around 5:30 pm this evening the Missouri House passed SB112 (New Markets Credit) that included an amendment to reduce the historic tax credit cap from $140 million to $90 million ($10 million cap on small projects) and another amendment to renew Paul McKee’s Distressed Areas Land Assemblage Tax Credit. As each of you know, this is legislation that would significantly harm St. Louis’s efforts to continue essential revitalization of historic buildings. This revitalization creates jobs, leverages private investment, broadens the tax base, and preserves the unique historic environment that remains our biggest asset as a region. It’s imperative that we call on advocates in the Senate to speak out against this bill to defeat it.

Paul McKee’s credit has created exactly zero jobs while the historic tax credit has created over 43,000. Paul McKee has torn down irreplaceable historic buildings with no promise of redevelopment while the historic tax credit has had an enormous impact in returning similar historic buildings back to life and property tax rolls. Defeating SB112 and its amendments is the obvious choice for future economic development and historic preservation in St. Louis. Pleas urge our senators to defeat SB112, which will be discussed tonight or tomorrow.

Sen. Jamilah Nasheed: 573-751-4415, 314-409-5730 (c) | jamilah.nasheed@senate.mo.gov
Sen. Joe Keaveny: 573-751-3599 | joe.keaveny@senate.mo.gov
Sen. Scott Sifton: 573-751-0220, 314-631-0445 (c) | scott.sifton@senate.mo.gov

From Deb Sheals of the Alliance for Investment, Jobs and Preservation

The Missouri Senate just passed a bill that will cap the historic tax credit program at $75 million per year, with no small deal exemption. This is a drastic cut from the current cap of $140 million. The bill is the Senate Substitute for HB1865, sponsored by Sen. Lembke.

Even though the House has already passed HB1285 to extend sunsets for many social service tax credits due to expire this year, several senators refused to allow those programs to continue unless the historic program was slashed, and the bill was passed out of the Senate with the new cap.

Sens. Keaveny, Schaffer, and Curls were stalwart supporters of the Historic program.

The bill will now go to the House for consideration. We still have strong support in the House and are hopeful that they will not take this up, but this is a hot issue and it’s the end of the session, so about anything goes.

It’s really unfortunate that a few senators feel the need to hold good social programs hostage for this. At a time when unemployment in the construction industry is well above 14%, we need programs that stimulate construction activity, and we all know the historic credit does that quite well. (Stats from the U.S. Bureau of Labor Statistics)

We will be watching this very closely, obviously, and will keep you in the loop.

As always, let your legislators know how you feel about this, especially those in the House of Representatives. Good things come to squeaky wheels.

by Michael R. Allen

Today the Missouri Senate will convene to consider the “economic development” bill (HCS SS SCS SB 8 ) passed by the House last week that would cut neighborhood and Main Street development across the state. The bill’s most damaging provisions are those that cap the issuance of historic tax credits for “small” projects at $10 million a year and one that would prohibit stacking the 9% low income and historic rehab tax credits. Anyone who has observed the renewal of urban neighborhoods and small towns across the state knows that small projects have led the way, and that stacking historic and low income tax credits have made transformative projects like Dick Gregory Place in St. Louis’ Ville possible. The use of these credits has created economic growth that has outpaced the US GDP, strengthened real property values and created wealth for thousands of Missourians.

These tools are not being curtailed to save the state money, or to cut back on tax credits. The Republicans in the legislature are not conservatives in any fiscal sense, because their leadership wants only to remove some credits to create new ones for cargo warehouses in suburban St. Louis, to lower the state corporate income tax and to increase the amount of money available each year — and the categories of eligible spending — for the Distressed Areas Land Assemblage Tax Credit (DALATC). While the leadership in the houses fortunately has failed to find consensus on how to shift available tax breaks from middle-class property owners to wealthy investors, there seems to be a possibility that the bill might be reconciled in conference if the Senate passes it.

Passage of the bill, and Governor Nixon’s signature, would be mistakes. Missouri’s strength comes from people who care about their communities enough to invest in their homes and buildings housing small businesses. These are people fighting similar patterns of disinvestment across the state, found on large scales in parts of St. Louis and Kansas City but also in small towns robbed of vitality and local wealth by corporate chains like Wal-Mart. The historic tax credit has enabled average people to reclaim their communities, and create skilled construction and professional jobs in the process. Not only have vacant or aging buildings been revitalized, but wealth has been created in local economies. Developers with larger capacity have joined these efforts by tackling big buildings.

Every year, the legislature seems to increase the flow of incentives toward activities that create wealth at the expense of communities. Cuts across the board would be one thing, and a philosophically consistent tax policy another. That is not what is on the table right now. Government policies that threaten local economies are far from conservative in any traditional sense. The legislature is looking at curbing proven, sustainable community development in order to enable large-scale economic activity that may not create wealth for struggling communities. Our state will suffer if these changes move forward.

Contact: Scott Holste, (573) 751-0290
Scott.Holste@mo.gov

Sam Murphey, (573) 751-0290
Sam.Murphey@mo.gov

FOR IMMEDIATE RELEASE
July 21, 2010

Gov. Nixon creates new commission to perform comprehensive review of state tax credit programs
Panel of business and community leaders, legislators will make recommendations to enhance job creation, boost return on investment for state

JEFFERSON CITY, Mo. – Gov. Jay Nixon today announced the creation of a Tax Credit Review Commission that will review the state’s 61 tax credit programs and make recommendations for greater efficacy and enhanced return on investment. Gov. Nixon named 25 business, community and legislative leaders to serve on the commission.

“Missouri must have sharp, effective development tools that will promote growth, create jobs, strengthen our communities and continue to drive our economic recovery forward,” Gov. Nixon said. “This commission will perform a critical analysis to ensure taxpayers receive the greatest possible return on investment from tax credit programs and that those programs are used efficiently and effectively. The work of the commission will play a vital role in reshaping the way the state uses financial incentives to achieve those important goals.”

The commission will analyze the efficacy and return on investment for each of the state’s 61 tax credit programs and make recommendations for modifications as appropriate.

Gov. Nixon appointed Steve Stogel and Chuck Gross to co-chair the Tax Credit Review Commission. Stogel is the President of DFC Group in St. Louis; Gross is the director of administration for St. Charles County. They are joined on the commission by leaders from the development, education, finance and labor communities, as well as members of the Missouri General Assembly.

From the Missouri Senate, Gov. Nixon named Sen. Matt Bartle (R-Lee’s Summit), Sen. Jolie Justus (D-Kansas City) and Sen. Robin Wright-Jones (D-St. Louis). Gov. Nixon’s appointees from the Missouri House are Rep. Tim Flook (R-Liberty) and Rep. Sam Komo (D-House Springs).

Gov. Nixon also named: Zack Boyers of U.S. Bancorp Community Development Corporation in St. Louis; Mark Gardner of Gardner Capital in Springfield; Luana Gifford of the American Federation of Teachers in Jefferson City; Bill Hall of Hallmark in Kansas City; Dee Joyner of Commerce Bank in St. Louis; David Kendrick of the Kansas City Building and Construction Trades Council; Alan Marble, President of Crowder College in Neosho; Troy Nash of Zimmer Real Estate Services in Kansas City; Melissa Randol of the Missouri School Boards Association in Jefferson City; Tom Reeves of Pulaski Bank in St. Louis; Penney Rector of the Missouri Association of School Administrators in Jefferson City; Russ Still, a member of the State Board of Education from Columbia; Craig Van Matre, a member of the Coordinating Board for Higher Education from Columbia; Ray Wagner of Enterprise Rent-A-Car in St. Louis; Todd Weaver of Legacy Building Group in St. Louis; Shannon Weber of the Carpenters’ District Council of Greater St. Louis and Vicinity; Mike Wood of the Missouri State Teachers Association in Jefferson City; and David Zimmerman of the Sheet Metal Workers International Association, Local 36 in St. Louis.

by Michael R. Allen

Tim Logan has a good article this morning about the state of Missouri’s historic tax credit program. Recently, the Department of Economic Development (DED) sent letters to already-approved historic tax credit project applicants stating that the projects were going back for further review. This applied to projects approved since July 1. The letters did not cite the substance of any DED rules that will govern further review.

In the article, DED spokesman John Fougere stated that the new rules were created to ensure compliance with the large project cap passed by the legislature in 2009. That cap went into effect January 1, 2010. Did DED miss the chance to ensure that half of this year’s projects are in compliance? And since estimated project cost is a requirement of even having an application reviewed, why are new rules needed to ensure that DED does not award too many tax credits? A calculator would suffice.

DED has not yet shared the language of the new rules with prospective applicants. If the new reviews are taking place, the rules must exist. If the rules exist, they should be shared. The historic rehab tax credit has been orderly, predictable and free from politics since day one. Some want to cut it or change it for budgetary reasons, and their arguments are respectable. What Governor Nixon is doing is something else entirely.