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05 May 2011

Kraus: Tax Credit Reform and Economic Development

Op. note: House Bill 18 is incorrectly identified in this missive as Senate Bill 18. SB18 would place a cap on corporate taxes.

Late last week, the Senate took up House Bills 116 and 316. As they came to us from the House, they were a simple tax amnesty program. Through committee negotiations and floor debate, they became a couple of the strongest bills this year (and some of the largest!). The legislation now includes economic development and tax credit reform measures. While I don’t agree with everything in the bills, I do think they are the best combination of what we have been offered. House Bills 116 and 316 were passed by the Senate this week and are now in the hands of the House.

For me, the key ingredient was the tax credit reform language. The combined bills established caps on the amount of some credits that could be allowed. They also added sunset provisions to all tax credits, meaning that the credit would expire unless the General Assembly specifically thought it worth re-authorizing. These reforms have been a top priority for me because of the savings they would bring to taxpayers. Because of the specific reforms in these bills, Missouri taxpayers would save $1.6 billion over 15 years if the bills pass the House and are signed by the governor.

A few weeks ago, I wrote about the border war with Kansas over jobs. We need to find funds for job retention, as it is much easier to keep a strong company than to attract a new one. House Bills 116 and 316 now contain $6 million in such job retention funds. If passed, I am confident that the bulk of those funds will be used to support keeping Kansas City area businesses from moving to Kansas. Early in the process, I fought hard to have this language included in the bill. With the help of other Kansas City area senators, we were even able to broaden the program with an amendment on the floor.

I am hopeful that the House will take up and pass the Senate’s changes to HBs 116 and 316, despite reservations about specific parts of the bills. It is a true compromise to benefit both economic development and taxpayers in Missouri.

Redistricting


On Saturday, April 30, the governor vetoed the map of revised congressional districts previously passed out of the General Assembly. On Wednesday, May 4, both the House and Senate voted to override the governor’s veto, which makes the map [HB193] effective for the 2012 elections. As I have written previously, I have reservations with the map. However, to keep the process where it belongs - in the Legislature and out of the courts - I cast a vote to override the governor.

Here is a link to the current map: Congressional District Map.

Next up will be redistricting for Missouri House and Senate seats. Outside panels appointed by the governor draw those maps. They have until September to get a 70 percent agreement of members on each map. These maps often go to the courts because 70 percent is a tough hurdle to meet when the committees are divided evenly on a political basis.

Stimulus Funds


I have also written previously about my opposition to the use of some federal stimulus funds, especially where they fill a hole that will just need to be fixed in next year’s budget. This week, three other senators and I filibustered Senate Bill 18, which contains $580 million in stimulus money. As part of an earlier deal, we had been promised that $250 million would be pulled out of the bill. When the bill reached the floor, that was not the case. We spoke on the floor for 16 hours to make our point that overspending, whether by the state or federal government, is no longer acceptable. Our efforts reduced the bill by $128 million; we fought for and will keep fighting for every dollar.

Keep in mind that our earlier opposition to extending unemployment saved Missouri businesses $108 million per year. All in all, our group of four fiscal conservatives had a big impact.

Welcome Visitors


This has been another busy week for school groups to make their annual trip to the Capitol to learn about state government. Four elementary schools from Lee’s Summit, Pleasant Lea, Hazel Grove, Meadow Lane, and Underwood, brought their fourth grade students down this week. I was glad to have the opportunity to visit with all of them.

Jenna Klausing from Lee’s Summit West High School performed here at the Capitol as part of the Missouri Alliance for Arts Education’s Fine Arts Education Day at the Capitol. I was pleased to meet both her and her mother, Sherry, as well as get a chance to visit again with Ben Martin. Ed and Linda Bergman and Sarah Jane Bever-Chritton also visited the office.

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