PUB DEF

BREAKING NEWS

A source tells PubDef that Gov. Matt Blunt is going to veto HB 327, the contoversial bill containing a $100 million land assemblage tax credit, within the hour.

UPDATE: It’s done. Here’s the press release…

Blunt Vetoes Giant Bill Packed with Excess Spending

Governor Says Good Wages, Health Care Are Quality Jobs ‘Musts’

JEFFERSON CITY - Gov. Matt Blunt today vetoed tax-credit legislation that came to his desk loaded down with excessive spending, including incentives for businesses that fail to pay average or above-average wages and fail to provide employees with health coverage.

In vetoing House Bill 327, the Governor said he is prepared to summon a special legislative session if legislative leaders are willing to pass a more restrained bill that will achieve the good objectives of this legislation such as expanding the successful Quality Jobs program - while setting aside special projects and excessive spending items.

The vetoed bill would have spent an estimated $200 million in excess of Quality Jobs reauthorization, and there were unknown expenses associated with the legislation that could cost Missourians even more. The legislation drew Blunt’s veto after growing large and expensive with a laundry list of projects that included creation of an “eminent domain train,” tax breaks for “phantom flights” to Europe and a provision that would harm many existing Missouri employers by putting them at a competitive disadvantage.

“There are important initiatives in the bill,” Blunt said. “The Quality Jobs Act we created in 2005 has helped Missourians create more than 94,000 new jobs since 2005. Ultimately, however, it became loaded with excessive spending that simply does not benefit the average Missouri taxpayer. There is no difference between spending taxpayer dollars by appropriations and spending them by tax credits. Each should meet the same test of fiscal responsibility.”

“I am committed to signing a fiscally responsible expansion of Quality Jobs, Enhanced Enterprise Zones and the New Market Tax Credits. The savings from a sounder bill will benefit the state for decades to come,” Blunt added.

Among the sections identified as problems by the governor:

Jobs and Health Care

Of greatest concern to the governor, the vetoed bill allowed Quality Jobs tax incentives to go to businesses that pay employees less than the average county wage and, more significantly, do not offer health care coverage to their employees. Governor Blunt created the Quality Jobs Act to help generate new family-supporting jobs with good pay levels and health coverage, but the vetoed legislation would have provided the same benefits to businesses that pay lower wages and do not offer health care.

“I will insist that job-creating incentives be provided to employers who pay at least average wages and provide health coverage,” Blunt said.

Eminent Domain Trains

Another part of the bill sought to provide eminent domain power at the behest of a Colorado company that is seeking rail tracks and other property to run “historic rail cars” as excursion entertainment.

Blunt had three objections to the provision. First, it provided a public bounty for dinner theater trains, an activity that offers, at most, the very smallest of effects on the economy. Second, it could complicate the governor’s plan to expand the Katy Trail on the Rock Island rail corridor. Third, Blunt said the state must not slide down “the slippery slope” of piecemeal awards of the power to take private property against an owner’s wish. Last year, Blunt signed into law on the nation’s strongest safeguards for private ownership, which was endangered by the U.S. Supreme Court’s pro-taking decision in Kelo versus New London, Conn.

Blunt said, “We must not extend the power of eminent domain at the very time we have been successfully restricting it.”

Phantom Flights to Europe

Blunt said transportation infrastructure improvements would have suffered from a new aviation fuel tax exemption offered for non-existent, future international flights that originate in Missouri and cross an ocean. The Missouri Department of Transportation opposed the provision and said transportation improvement would lose $400,000 in revenue.

Blunt said, “At present, no transoceanic flights originate in Missouri. Of additional concern, as written, it is possible that airlines could claim the exemptions for flights that merely connect with trans-ocean flights in U.S. cities in other states.”

Hurting Established Employers

The governor also expressed concern with a change in state tax laws that could cause established Missouri employers, particularly distribution companies, to operate at a competitive disadvantage. House Bill 327 would give tax breaks to new distribution companies, while denying the benefit to existing businesses.

Summary

“We have established a new economic climate that allows innovative Missourians to more easily create new jobs and quality jobs in high numbers, attracts new businesses, and strengthens established employers,” Blunt said. “The new direction in our economy relies on the enterprising spirit of the people and the Missouri work ethic. New state policies are supporting and empowering this growth by balancing a budget that was $1 billion in the red when I became governor, by establishing clear incentives for high-quality, family-supporting jobs with health care coverage, and by protecting our small business owners and large employers from the long-ignored threats of frivolous lawsuits and other regulatory burdens.”

Since taking office Blunt has made it priority to restore balance to the state’s budget. Overcoming an inherited $1 billion deficit he was able to balance the state’s budget, make important investments in Missouri’s future and secure $200 million for priorities like education and health care in future fiscal years.

The governor signed budgets that include more than $675 million in education aid to benefit Missouri students of all ages including more than half a billion dollars for K-12 education. His Lewis & Clark Discovery Initiative generates an additional $335 million to strengthen Missouri’s colleges and universities. Blunt secured these significant increases without a single penny of job killing new taxes.

The governor has helped create a jobs climate that has enabled Missouri employers to create more than 94,000 new jobs since January 2005.

UPDATE 2: A second press release…

What Missourians are Saying About Gov. Blunt’s Veto of House Bill 327

The following Missourians today voiced their support for the governor’s veto of House Bill 327:

“We appreciate the Governor’s careful consideration of House Bill 327 and recognize the difficult decision he had to make on this legislation. We also support his call for a special legislative session to address the Quality Jobs program and Enhanced Enterprise Zones. These are core economic development programs, which must be expanded in order for our state to create jobs and encourage growth.”
Jim Anderson
President, Springfield Chamber of Commerce

“The governor was right to veto House Bill 327. Time and again legislators are told by special interest lobbyists that if only their particular industry could be granted an exemption from state taxes that will produce economic growth, but they never discuss how these giveaways hurt Missouri taxpayers. This legislation was packed with special interest projects and excessive spending that would have taken Missouri in the wrong direction. I applaud Governor Blunt for protecting Missouri taxpayers by using his veto pen to stop House Bill 327 from becoming law.”
Matt Bartle
State Senator, District 8

“I was concerned all along that the good in the bill was not enough to out weigh the concerns in other provisions. I know this was not an easy decision but the Governor made the right decision.”
Ed Emery
State Representative, District 126

“I supported the Governor’s priorities in this bill (Quality Jobs and Enhanced Enterprise Zones), as well as the Land Assemblage provision. It is a shame that these important economic development enhancements had to be lost due to unrelated, costly amendments. I hope the general assembly will be able to enact these three provisions quickly.”
Chuck Gross
Former State Senator and Budget Chairman

“This legislation would have put Cape Girardeau County into a conflict of over $500,000 for county revenue. We cannot afford this amount of reduction from our budget, if it is withheld.
Gerald Jones
Presiding Commissioner, Cape Girardeau County

“I agree with Governor Blunt’s decision to veto House Bill 327. There were an awful lot of good things in this bill but when you add up the plusses and the minuses the minuses far outweighed the good.”
Charlie Kruse
President, Missouri Farm Bureau

“I applaud Gov Blunt for giving the General Assembly a second chance to craft sound public policy that continues to facilitate job growth and economic development while practicing responsible stewardship of the people’s money and ensuring Missouri’s healthy and solid financial foundation.”
Brad Lager
State Senator, District 12

“I support Governor Blunt’s veto of House Bill 327. In my opinion, the bill’s negative ramifications far outweigh its positive characteristics. The uncertain fiscal impact on the state is a cause of great concern, as is the unilateral exemption of certain products and materials from sales and use taxes at the local level. Quality Jobs is an extremely important economic development tool. I urge the General Assembly to pass a clean, stand-alone bill to allow Quality Jobs to be workable and successful.”
Ken McClure
Gov. Blunt’s former Chief of Staff and
A former head of the Missouri Senate Appropriations Committee Staff

“Brick and mortar retailers across the state who have to compete with foreign competitors appreciate the governor’s veto of House Bill 327, and by this action keeping the playing field level for Missouri businesses.”
David Overfelt
President, Missouri Retailers Association

“House Bill 327 would have had a dramatic negative impact on funding for highways and bridges in Missouri. By vetoing this bill, Governor Blunt is showing a strong commitment to transportation in our state, which means fewer fatalities on our roadways and greater economic opportunities for our citizens. I know the governor had to make a difficult decision, but it was the right decision. I thank him for his outstanding leadership on this issue and for safeguarding our critical transportation system.”
Pete Rahn
Director, Missouri Department of Transportation

“Governor Blunt’s veto of House Bill 327 is an example of true leadership. While House Bill 327 contains a great number of good economic development tools including some of my own amendments, the final bill missed a very important step – the conference committee. By vetoing 327, the legislature can come back with the good ideas and discard those we cannot afford.”
Delbert Scott
State Senator, District 28

“House Bill 327 gets in the way of keeping Missouri on a pro-growth path.”
Rex Sinquefield
President, Show-Me Institute

UPDATE 3: From the Arch City Chronicle: Alderman April Ford Griffin had lobbied against the bill…

Governor Matt Blunt
Office of the Governor
Room 216, State Capitol Building
Jefferson City, Missouri 65101

Dear Governor:

As Alderwoman of the 5th Ward of the City of St. Louis, I write this letter requesting your humble consideration to please veto HB 991 “Land Assemblage Tax Credit Act” pertaining to the “Project” as described in the media, targeted primarily for the 5th Ward of the City of St. Louis.

My concern from the beginning is there must be community input on this major economic development. Residents, Business Owners, and other stakeholders of the 5th Ward that I represent deserve nothing less and they all are citizens of the State of Missouri.

Please feel free to call me if there is further understanding of this matter required at (314) 941-0186. Thanking you in advance for your consideration and support.

Respectfully yours,

April Ford-Griffin
Alderwoman, 5th Ward
City of St. Louis

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