TAX NEWS - 
2010
Missouri Tax: Missouri's representatives wrap up work on Ford tax breaks, pension reform during special session
The primary purpose of the special session was to entice Ford Motor Co. to make a new vehicle model at its Claycomo assembly plant near Kansas City with as much as $100 million of tax incentives over 10 years if the company will agree to make a $200 million investment in a new product line.
The credits were to be paid for by requiring new state employees to begin contributing 4 percent of their wages to the Missouri State Employees' Retirement System (MOSER), but House members instead voted to separate the two issues and instead fund the tax credits with existing credits available through the state's Quality Jobs program.
The house passed expanded legislation extending tax breaks to senior citizens, computerized data centers and manufacturers in a broadly defined transportation sector encompassing everything from bicycles to rockets and food-vendor carts to floating offshore oil platforms.
Lawmakers acknowledged the legislation goes beyond the agenda set by Nixon for the special session, possibly violating the Missouri Constitution. House Speaker Ron Richard said he has asked Nixon to expand his special session call to include the additional tax incentives — something Nixon has indicated he is unlikely to do.
The House passed the tax-break legislation 125-19. The pension reform plan passed 92-54.
District 118 Rep. Stanley Cox, R-Sedalia, said he voted for both measures but believes resistance to some of the provisions in the Missouri Senate likely will lead to different versions of the bills being merged in a conference committee, if the Senate approves legislation.
"Nothing is for sure in a special session. There are some substantial differences in approach that have to be reconciled and there are some in the Senate. A couple senators are pretty firm on their opinions. In the Senate, unlike the House, one or two senators can kill anything. It is still up in the air, but hopefully we can get something through we can all agree upon," Cox said.
Cox said he supported the move to try to encourage job growth through Ford and suppliers across the state who would also benefit from the credits.
He said pension reform was long overdue, noting that the MOSER system is an unfunded liability that could grow to as much as $150 million in 10 years.
"Either we address this now or in five years. If we do it now it will be easier. If we wait five years, the choice will be either to raise taxes to support the liability or cut people's pensions, which I don't think is right," Cox said.
Sen. Delbert Scott, R-Lowry City, said the Senate will take up the proposals on Thursday.
He said the scope of the legislation passed in the House was outside the call of the governor and he did not expect their expanded packages to be included in a final measure. He said he expects the Senate to take up its own version of the bills, rather than using the House versions.
Scott said that special sessions in primary years can be difficult, as members try to position themselves as job creators or tough fiscal conservatives.
He said he opposed the House version of the bills and would rather see the tax credits remain tied to reform of MOSER in a single bill.
"I am cautiously optimistic they will do what the Senate did at the end of the regular session and will pass the bill, but predicting the Legislature like predicting the shape of Jell-O," Scott said.
Both lawmakers stressed that the pension reform does not apply to a state teachers pension fund that already sees regular contributions from employees. Teacher union officials have raised concerns that the governor or the General Assembly may try to attach future tax credits to their plan.
"Those things have never been coupled together and they won't be during this special session," Scott said.
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