Good Tax Policy 1, Lobbyists 0
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Okay, so the real score is probably Lobbyists 7,565,545,312,212 Good Tax Policy 1, but in this case the Missouri Senate did the right thing.
See, Bombardier is thinking about building a plant in Kansas City adjacent to the airport. But first, they want to milk the State of Missouri for all it’s got before committing to do so. The Missouri House passed the proposal but a Senate Committee decided that it was too rich even for them and voted it down.
The subsidies would be up to $40 million per year for 22 years. That’s $880 million for Bombardier from the State of Missouri. The plant itself would only cost $375 million, so the company is making over 2:1 on their money with little risk as the enabling legislation only says that a “reasonable” repayment plan be in place before the credits are issued. If Bombardier doesn’t meet the required payroll for the given year they will simply forfeit the credits for that year, not be required to pay back any of the credit previously earned (hey, for Missouri that’s a step in the right direction).
I loathe incentives such as these. Most of them go to taxpayers for doing what they would have done anyway without the subsidies. Of course, Bombardier has to certify that another city or country is in the running and they would only locate in Missouri if they get the credits *wink, wink*.
The legislation is here if you want to read it (why would you?). I don’t expect it to be down long, though. The Missouri Lege is known for handing out incentives like hotcakes (Edward Jones, you hear that?) and the lobbyists will be hard at work in the last 12 days to swing the two GOP Senators back to the yes column.
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April 30th, 2008 13:03
Lets all hope and pray this does not somehow get passed in some way or another. I am fearful of what would happen if it did…would my personal taxes go up to offset the decreases in money coming in? Or will services take cuts? Its not like we have not seen major cuts in the recent years…can we handle any more? I don’t think so.
April 30th, 2008 19:08
This is classic Bombardier of you look in to their tactics for the last decade or so–and classic corporate welfare–ask for an inordinate amount of tax security (which is, of course, always at the expense of the people who would ostensibly benefit). The trend is to come back asking for more, and with an initial investment like this, Missourians would be hard pressed to not agree! It would be our loss, and we’d try to recover it. I say keep Missouri tax incentives in Missouri. Let Bombardier come here because of the allure of the devalued dollar. We have no business stretching the budget like this!
April 30th, 2008 22:35
Wait a minute, if you are going to give debits to those lobbying for the Bombardier deal shouldn’t Sinquefield and his lobbyist get credits?
Seems only fair and besides, it would aggravate the hell out of a lot of people.
May 1st, 2008 07:14
Will we see reduced services? I’d say definitely, even if the Lege says that it’s a net gain. You can’t give away $880 million and not reduce services. These tax credits often come back to bite states because they are so desperate to throw money at companies that there aren’t many safeguards to keep companies from simply closing up shop when they get more money somewhere else.
At least this time Missouri did say that Bombardier won’t get incentives after they miss hiring targets. That hasn’t been included in the past and companies have continued to get incentives even when they haven’t kept the jobs here.
And the opponents should get some credit for at least winning one battle. My guess is that they’ll lose the war, but for one day they can stand proud that they stood up and won.
May 1st, 2008 08:11
Sinquefield is not the opponent…he is completely against this deal. He realizes how harmful it would be for the state. Whether or not people agree with his education reform ideas, that does not mean they need to see him as the opponent on everything. I happen to be a big supporter of his. I know he has the background to know what he is taling about. Either way, he does not support this bill as it stands.
May 1st, 2008 08:20
Mysti,
I meant it purely in the legislative sense when I said “opponent”. He was in opposition to the bill.
I really don’t have much to say about Sinquefield and don’t really have any opinion of him. I just wanted to clarify that statement and say I wasn’t implying anything with it.