A Special Session was called by Governor Nixon the first week in December to work on a package of incentives to bring jobs to Missouri. Acting with surprising speed, the Senate passed a measure that authorized about $150 million per year in tax breaks and other subsidies for Boeing if they locate their new production plant for the 777X commercial airliner. The 777X is Boeing's newest commercial airplane and is capable of carrying 400 passengers. The company already has firm orders in hand for the plane, so it is going to be built somewhere.
Boeing was originally planning on locating the facility in Seattle, Washington where they already have a strong presence. That fell through after the machinists union in Seattle voted to not give concessions Boeing was asking for. At that point Boeing asked for proposals from about a dozen states, including Missouri, as to what incentives they could offer in exchange for bringing an assembly plant there. Such a plant would provide anywhere from 2000-8000 high paying jobs, depending on how much of the assembly would be done in that state. Missouri was asked to make a proposal, in large part because of Boeing assembly plant already located in St. Louis that makes military Fighter Jets.
While I dislike the idea of a company playing states against each other in an obvious attempt to see which one will put the most taxpayer dollars on the table, and truly dislike what I would call corporate welfare, but the sad fact is, that is how economic development is done these days. Yes, companies also look at items such as a skilled work force, infrastructure, and quality of life, but it also takes hard cash incentives in the form of tax breaks, training funds, tax increment financing, and other instruments to convince a company to locate a facility there. Once one of the dozen states began making offers, the rest had no choice but to follow, if they were interested in creating more jobs.
On the upside, under the bill passed by the Senate, Boeing would get no tax incentives until they actually created 2000+ new jobs. So, there was no loss in state funds or budget reductions if Boeing decides to commit to Missouri on this opportunity. Benchmarks have to be met before subsidies kick in. This is in contrast to what has happened in Moberly, Missouri, where subsidies were handed out upfront and no economic activity took place. Moberly now finds itself embroiled in a lawsuit over the issue.
Many economic development experts don't give Missouri much of a chance at landing this Boeing proposal. However, just that we were asked to submit a proposal gives hope to the project. Boeing asked that all proposals be finished and submitted by December 10, 2013, and they expect to make a decision early 2014 as to where they will locate.
The house did vote on SB1 and it passed 127-20. So, if we do get part of the Boeing deal, this means 2000+ more jobs for Missourians, Missouri will benefit from Boeing salaries being spent in Missouri, and it certainly opens the door for Boeing to look strongly at Missouri down the road, if they start manufacturing the next generation of Fighter Jets. If Missouri does not get any of this Boeing project, it gives even more support to why Missouri needs to be a Right to Work state. When the Governor was asked "if the Senate and House passed SB1, would he then support Right to Work in Missouri", his answer was "NO".
Many of the 48th Missouri House District constituents have contacted me wanting to know why the Governor did not support HB253 tax cut bill this past session, that would have benefited small business, created jobs and increased state revenue, but then ask the Senate and House to support his $150 million tax credit request, to a huge corporation. These voters indicate they feel the Governor is more interested in big corporations that belong to Unions rather than the small businesses that made Missouri strong. These voters are expressing that Missouri needs to be looking more at "Right to Work " and a "Fair Tax" program. By doing this, they feel many businesses will move to Missouri especially those from neighboring states, without giving up huge tax credits for long periods of time.
So, we wait to hear from Boeing. Whichever way they decide, passage of SB1 shows that Republicans do work with the Governor, and that Missouri strongly indicates to future businesses outside of Missouri "Welcome -- Come to Missouri".
I will continue to work hard to represent you as a voter in the Missouri 48th House District, listen to your concerns, and help with your personal and business needs. Never hesitate to contact me at Dave.Muntzel@house.mo.gov or June Cardwell, my legislative assistant, at June.Cardwell@house.mo.gov or 573 751-0169.
Christmas will be here soon. Let us all prepare for the celebration of Christ Birth. I feel Jesus smiles when family and friends get together and remember the Reason for the Season. Be safe in your travels, hug your loved ones, help those who are in need, and give thanks to the Lord for your Freedom.
Merry Christmas and have a Happy and Prosperous 2014.