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MO: Panel to study state’s growing tax incentives

By   /   August 30, 2012  /   No Comments

By Johnny Kampis | Missouri Watchdog

Gov. Jay Nixon

ST. LOUIS — Gov. Jay Nixon is reconvening a panel to study Missouri’s tax credit programs two years after a similar group’s recommendations were ignored by the Legislature.

Nixon, two months removed from a general election fight to keep his seat, said the Missouri Tax Credit Review Commission will begin meeting Sept. 12 in light of significant growth of the incentives.

During the Democrat’s past two years in office, the corporate welfare tally reached an all time high of $629 million. That’s an increase of more than 20 percent since the $523 million in tax credits Missouri offered business and industry in 2010, when the commission first met.

In a statement, Nixon said it was his duty to ensure that “Missouri taxpayers receive the greatest possible return on investment from these programs” and that the commission would “develop recommendations for making these programs more efficient.”

Washington D.C. think tank Good Jobs First released a report in April showing that two of Missouri’s incentive programs — the Quality Jobs Program and the Missouri Automotive Manufacturing Jobs Act — allow employers to hold on to 100 percent of their employees’ state withholding taxes.

Only five such programs exist in the country.

Auditor Thomas Schweich

Missouri Auditor Thomas Schweich gave the Quality Jobs Program a poor rating in July for overstating employment numbers, among other weaknesses.

Missouri Watchdog reported in June that Ford supplier LMV Automotive Systems will get $5 million in tax breaks through four separate incentive programs for building a plant in Liberty.

The Nixon administration has faced much criticism for Missouri’s liberal use of tax incentives, but the Republican-dominated Legislature shares in the blame.

The General Assembly took no action last year after a report from the commission recommended eliminating such programs as the Wine and Grape Producers New Enterprise Creation and Charcoal Producers Research Tax Credit.

The panel said the state should cut 28 tax credit programs that had “outlived their usefulness and do not create a justifiable benefit in relation to their cost to taxpayers.” It also said changes needed to be made to 20 others. 

Missouri first offered the Senior Citizen’s Property Tax Credit in 1973. Since then, the number of such programs has grown to 61.

Most are offered to recruit business and industry to the state, but critics question whether the costs of the tax breaks are worth the jobs created.

Greg LeRoy

“With unemployment still so high, taxpayers have a right to expect that economic-development investments create significant numbers of quality jobs,” said Greg LeRoy, Good Jobs First Executive Director.

The new commission will include 27 lawmakers and business leaders. Former state Senate Appropriations Chairman Chuck Gross and St. Louis-based DFC Group president Steve Stogel will co-chair the panel.

Contact Johnny Kampis at johnny@missouriwatchdog.org. For more Missouri Watchdog updates, visit Facebook and Twitter, or sign up for a free newsletter.

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Johnny Kampis is a content editor at Watchdog.org, and is helping to start the organization’s Alabama Watchdog bureau in his home state. Johnny previously worked in the newspaper industry and as a freelance writer, and has been published in The New York Times, Time.com and Atlanta Journal-Constitution.

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