Business tax cuts strongly supported
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Business tax cuts strongly supported

Date: February 7, 2007
By: Cliff Ainsworth
State Capitol Bureau
Links: SB 282, HB 327

JEFFERSON CITY - A proposal by Gov. Matt Blunt to increase tax breaks for job-creating businesses in Missouri are not enough, according to a state senator who wants to more than triple the size of the governor's cuts.

Sen. John Griesheimer, R-Washington, presented a bill Wednesday to the Senate Economic Development Committee that calls for doubling the tax incentives provided by the Quality Jobs Program to $24 million, but said he would prefer to raise the cuts to $75 million.

"I think it needs to be more than $24 million," Griesheimer told the committee, which he chairs. 

In his State of the State address last month, Blunt asked the legislature to double the program's tax incentives to $24 million, but Blunt's spokeswoman Jessica Robinson said the governor would be willing to consider other options for business tax cuts.

"We've seen many benefits to our state in the fact that the program brings many high-quality jobs," Robinson said.

First enacted in 2005, the Quality Jobs Program is designed to encourage Missouri businesses to create new jobs by providing tax breaks.  The original program, which has been credited by the state's Economic Development Department for generating 12,000 new jobs in Missouri, capped the cuts at $12 million.  But many legislators and business groups argue the program's success calls for either a dramatic increase in the limit, or eliminating the cap altogether.

Ray McCarty, a lobbyist, urged the committee on behalf of numerous business groups to remove the cap, an idea that committee Vice-Chair Chris Koster, R-Harrisonville, said he supported. 

"I would like to see business be able to exist in a frictionless environment for five years, (where) government is completely out of their way," Koster said.  But he tempered his position by raising the possibility of requiring businesses under the program to pay for 75 percent of their employees' health insurance premiums.  Currently, companies that receive breaks must pay for 50 percent of the premiums, as well as create new jobs and pay their employees at least the average wage in their county.

Testimony to the committee was overwhelmingly supportive of increasing the tax cuts, but eliminating the cap completely was not immediately embraced by all committee members. 

 "I just heard about it today, about lifting the cap. I don't know if I like it, or if I don't like it," said Sen. Harry Kennedy, D-St. Louis.  "I do know that I like some kind of review so people don't go crazy and our friends from the newspapers don't then want to write that we're being irresponsible."

A separate bill that would double the capacity of the Quality Jobs Program tax breaks to $24 million was approved Wednesday by a Special House Committee on Job Creation and Economic Development.

The Senate Economic Development Committee took no action Wednesday on Griesheimer's bill. Griesheimer's office said he plans to resubmit a substitute bill next week that will  raise the tax cuts to $75 million.