Missouri Senate leader announced his plan of cutting tax credits on China-hub program
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Missouri Senate leader announced his plan of cutting tax credits on China-hub program

Date: September 13, 2011
By: Mengti Xu
State Capitol Bureau

Missouri Senate Pro-Tem Announced Plans to Cut Tax Credits on China Hub

JEFFERSON CITY - On Tuesday morning, President Pro-Tem Rob Mayer announced he was dropping one of the largest provisions in the China Hub proposal.

Before Mayer announced the changes on the proposed tax breaks for developing an air cargo transport hub in St. Louis airport, $360 million of the tax breaks were offered to finish the warehouse program. $60 million of those tax breaks were for companies to handle exports, while the $300 million left of the proposed tax breaks were for developers to build the warehouse for loading cargo imported from China, and the latter was the provision that was put to sleep.

Mayer cited the reasoning for dropping the warehouse provision as not being able to receive the necessary votes.Mayer came to this conclusion the day after Senators voiced their problems with the bill at a briefing session. And following the briefing session, Republicans met in a closed-door caucus, where sources have said that a majority of the Senators were either against the provision or needed more information.

Mayer said his new proposal would hand out tax breaks for businesses that were actually trying to get involved in forwarding international shipments. However, this was a smaller portion of the Aerotropolis plan. The new substitute says the total amount of air export tax credits that may be authorized under the Aerotropolis Trade Incentive and Tax Credit Act cannot exceed $60 million.

"So instead of it being it is own separate program, per say, it would go through the same economic development that everything else goes through," Sen. Brad Lager, R-Maryville, said. "It is no longer a specific entitlement provision in the bill itself. In order to qualify for those incentives they would apply through the Compete Missouri program."

The Compete Missouri program provides tax incentives for job creation and capital investment. Therefore, the warehouse will have to compete with other Missouri businesses for funding by proving it will actually create jobs with no doubt.  

The original thought behind the China Hub proposal's supporters are to generate jobs and boost the state's economy.

This issue dragged on in the Senate for hours after it had convened once already in the morning. Sen. Jason Crowell, R-Cape Girardeau, said he hopes the Senate can come to a compromise that can produce new opportunities for jobs in Missouri and reduce the state's exposures of some tax credits that will not get a good return on the investments.

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