Incentive package includes $5 million tax credit annually for $500 million investment
JEFFERSON CITY, Mo. — What started as a way to attract a $1 billion investment from a specific automotive manufacturer has expanded into comprehensive workforce and economic development legislation.
On Wednesday — roughly one week after news broke that General Motors was considering its Wentzville, Missouri, plant for expansion — Gov. Mike Parson rolled out a plan aimed at attracting and retaining major business expansion projects. One piece of the legislation would target the entire automotive industry.
“From the very beginning, our administration has been focused on two key issues, workforce development and infrastructure,” Parson said. “Whether it’s working with major businesses like General Motors or small family businesses all across the state, business leaders throughout the state have shared the same challenges — Missouri does not have the tools that we need to compete, and to win. To make Missouri the “Best in the Midwest,” we must take action on workforce development and infrastructure.”
“This is the kind of economic development opportunity that Missouri can’t afford to ignore. I appreciate General Motors’ confidence in Missouri as a place to do business, and I support the Governor’s plan 100 percent,” Senate President Pro Tem Dave Schatz said.
The plan includes legislation already working its way through the process — Fast Track, Missouri One Start, and Missouri Works. One piece, Automotive Economic Development Tools, is a new piece to the puzzle.
One of the major pieces package is tax incentives for the automotive industry. Automotive Economic Development Tools is aimed at helping retain automotive jobs by granting $5 million in tax credits annually to automotive manufacturers that invest $500 million or more in plant upgrades and agree to retain current workers.
Missouri’s current overall tax credit liability is currently unknown.
“We’re talking about an industry that reaches every corner of our state,” Director of Economic Development Rob Dixon said. “We owe it to the 1 million plus Missourians employed in this industry to fight for them, to build the most competitive tools we can, and submit a strong proposal on their behalf. This package of legislation does that, and it does it in a way that will provide a positive return for taxpayers and help Missouri grow in the long term.”
But with a May 17, 2019, deadline for the legislation to cross the finish line in the Missouri General Assembly, lawmakers need to move fast during the regular session — a task made more difficult by the current deadlock between some senators and representatives holding up legislation.
The Fast Tack grant incentive program, which would create a scholarship program for adults seeking training in high demand jobs, has had a rocky time in the state Senate.
The House version, HB 225 sponsored by Rep. Kathy Swan, passed the body in a 101-49 vote at the end of February. It has made it to the Senate floor, but received considerable pushback from some lawmakers, and there is debate on what a path forward would look like — if there is one.
Republican Sen. Bill Eigel said he wouldn’t call Fast Track discussions “dead” but couldn’t definitively say if the legislation will progress, especially without any education reform measure attached. And despite assertions from other Republicans, Eigel doesn’t believe Fast Track and the General Motors deal are linked.
“We’ve been looking for a connection to the Fast Track bill to the General Motors program for the past several days and haven’t found a single one. We’ve reached out to General Motors and did not get the sense Fast Track is critical to their bid process,” Eigel told The Missouri Times. “At this point, I don’t see how they connect.”
“I think we can put a competitive offer on the table for GM that actually doesn’t expand any of our programs beyond what we already have,” he said.
Both chambers have passed out a version of the Missouri One Start program. The legislation is designed to improve Missouri’s workforce programs that help businesses recruit, onboard, and train large numbers of job applicants during major expansions. HB 469, sponsored by Rep. Derek Grier, is on the Senate informal calendar, and SB 68, sponsored by Sen. Lincoln Hough, is on the House formal calendar.
Also included in the package is legislation on Missouri Works – Deal Closing Fund. The measure is aimed at giving Missouri a negotiating tool to close deals with companies by granting tax credits earlier in business expansion and includes a clawback provision.
Kaitlyn Schallhorn contributed to this report.