Conservative groups oppose Republican leadership on Boeing incentives

  JEFFERSON CITY, Mo. – As legislative Republican leaders work to gain support from conservative lawmakers for legislation that would expand tax credits to encourage Boeing to place a new production line in St. Louis, key conservative groups have announced their opposition to the current proposal.

United for Missouri, a conservative activist group, took to social media on Monday to call on its members to “Stop the Governor’s Proposed Expansion of Corporate Welfare” — criticizing Nixon’s call to expand four existing tax credit programs by $150 million annually and requesting their supporters call their local lawmakers and urge them to oppose the plan. In a post on its website, the group said the legislature should instead reallocate existing tax credits and pass “broad based” tax reform, not targeted tax credit expansion.

“Does all this mean that Missouri should not try to capture the new Boeing plant? Absolutely not,” the group wrote, “[b]ut the legislature should not expand corporate welfare in doing so!”

The Show Me Institute, a conservative think-tank, also voiced their opposition to the proposal, calling it the “definition of cronyism,” and, like United for Missouri, said they were in favor of broader tax changes like they supported in House Bill 253, legislation vetoed by Nixon that would have slashed corporate taxes and provided fractional relief for individuals.

“We’re going to basically wipe out taxes for a single business,” under the current plan, wrote Patrick Ishmael, a researcher for the Show Me Institute. “Here’s a better idea: Instead of giving out massive special tax breaks to one company or project, how about we stop taxing the income of all businesses? And don’t stop there: eliminate the individual income tax and stop sponsoring special tax cuts like this one for just a handful of companies and well-connected individuals.”

Speaking with reporters on Monday afternoon, House Speaker Tim Jones said Republicans in his caucus will not be monolithic on any policy – and expanding a tax credit is one of them.

“I would remind everyone that the house passed a significant tax credit reform bill at the end of session,” he said. “It had 100 million in savings and got rid of several programs. I think it is important that states remain competitive with these as long as the economic incentive programs we have shown a good return on investments.”

For his part, Jones – as well as other legislative leaders – was noncommittal about whether he would ultimately support a proposal to expand the tax credits. He said he and other House Republicans wanted more details from Nixon about the exact cost of the expansion and what he sees as the potential return on investment from assisting Boeing.

State Sen. Eric Schmitt, R-St. Louis, who has supported tax credit reform in the past, is carrying Nixon’s legislation in the Senate. Speaking to reporters, Schmitt said the scope of Nixon’s special session resolution is too narrow to consider broader tax credit reform, but that he is confident in the effectiveness of the four existing programs he is seeking to expand.

“This is a real opportunity,” he said. “I have a comfort level being familiar with these four programs being in existence — we’re not reinventing the wheel. There are taxpayer protections built into those problems.”