Today the House passed Senate Bill 1. This legislation has the potential to create thousands of aerospace industry jobs in Missouri. Governor Nixon called for a special session to pass legislation that will make it fiscally attractive for Boeing to build its newly designed aircraft, the 777X, in Missouri. After all, Boeing’s offer to Seattle, Washington unions was meant with sound rejection, so Boeing looked to business-friendly states such as Missouri. That’s the good news; the “even better news” is the fiscal note for this bill is ZERO! It will cost the state nothing. That’s because the bill makes use of the already existing tax credit program –it increases the caps on those as part of the incentive. So don’t worry the budgets of other programs will not be affected; that is, there’ll be no robbing Peter to pay Paul, or maybe I should say no robbing of education to pay business.
Debate on the House floor revealed several pros:
· Tax credits are often misunderstood. They are not “corporate welfare”. Many think business tax credits are money hand-outs. Not the case. Just as with any other tax credits certain conditions must be met or no tax credits are awarded. The company will have to meet employment numbers as a condition of the credit.
· The bill calls for accountability: Boeing must file an annual report detailing benefits it receives from the state and its net fiscal benefits to the state.
· It also calls for monitoring: it must file a report through the Missouri Department of Economic Development outlining its employment outreach to minorities and women.
· The aerospace project will create thousands of skilled-worker positions of a higher income bracket. That will create an economic ripple effect.
· Missouri businesses that supply Boeing with needed materials will benefit.
· College programs that educate the needed skilled workers will also benefit.
· Since the tax-credit cap increases are tied to the aerospace industry only, and since Boeing is the only company currently operating in Missouri with such a program ready to be implemented by June 2014, then if it rejects Missouri’s offer and takes the 777X project elsewhere the provisions of SB 1 are applicably null and void.
One significant and undeniable question remains: why did Governor Nixon jump so quickly (other than a looming December 10 deadline to states by Boeing) to pass legislation for a tax-credit-cap increase when he vetoed a tax cut bill for all Missourians? I find that interesting and revealing. However, it will give tax cut legislation leverage in the coming 2014 session.
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