Senate approves tax credits for Canadian aircraft company
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Senate approves tax credits for Canadian aircraft company

Date: May 1, 2008
By: Bria Scudder
State Capitol Bureau

JEFFERSON CITY - Missouri's Senate approved up to $240 million in tax credits during eight years to Bombardier, a Canadian aircraft company, that supporters say could bring 2,100 new jobs to Missouri.

Although the tax credits are aimed at attracting a jet-manufacturing plant in Kansas City, it was a Kansas City senator who delivered the first attacks against the proposal.

Sen. Matt Bartle, R-Lee's Summit, said it was a mistake to invest tax resources into manufacturing when the economic future for the state lies with new technologies.

"Americans are unwilling to work for the going rate for manufacturing, and it's been this way for 50 years," Bartle said. "For 50 years, manufacturing jobs have been moving to countries where the wage base will work for less."

Critics in the Senate also voiced doubts about the future of the company.

"We don't know the aircraft manufacturing business. We don't know its prospects. We don't know its overall health in the current marketplace," Bartle said.  "We're buying $240 million of junk bonds."

The bill's sponsor is the Senate's GOP leader, Sen. Charlie Shields, R-St. Joseph. He argued that Missouri would not lose because the bill would require the company to refund the tax credits after the plant became operational. 

"This has a positive direct internal rate of return requirement in the legislation," Shields said.

Another issue was that legislators said they were concerned that they were investing in a foreign company rather than a Missouri-based company.

"We're giving this French Canadian company a quarter-billion-dollar tax cut," Bartle said. "One company that's not an American company, and one company that's not a Missouri-based company. We are voting today to prefer this French Canadian company over every other employer in the state of Missouri."

Supporters replied that the high-salary jobs required by the bill, along with the requirement for health insurance coverage for workers, would benefit Missouri workers. Shields said the company is expected to hire about 2,100 jobs for the plant.

During the opening hours of debate Thursday, Shields addressed the personal relationship of the governor's family with the company.

Shields acknowledged that Gov. Matt Blunt's sister, Amy Blunt, worked for a Kansas City law firm retained by Bombardier.

Shields argued against amendments that had been proposed earlier in the Senate that would have prohibited relatives of the administration from working for the aircraft company.

"I don't think that we ought to be in that business of taking people and putting them out of a job," Shields said.

Sen. Rita Days, D-St. Louis, said it's unique for legislators to take advantage of their positions by voting to create new jobs for themselves.

"It has been done before, Senator, where we will have a bill and we will put positions in bills, and then you know people we have eight years here, and people will leave this and go right to another position," she said.

The tax-credit proposal now goes back to the House, which had approved a much higher $880 million package of tax credits for the Canadian firm.

The House can accept the $240 million Senate plan for demand a conference committee to work out the differences in the remaining two weeks of the legislative session.