A fund designed to offer incentives to Missouri science and technology companies has been declared unconstitutional by a Cole County Circuit Court judge.
And although lawmakers were able to pass legislation creating the fund during a special session last fall, Senate President Pro Tem Rob Mayer said Tuesday he doesn’t believe it will get much traction this year.
The reason, Mayer said, is many in the Senate will demand changes to Missouri’s tax credit system — an idea that died twice last year over differences between Republican leaders — before signing off on the fund, known as the Missouri Science and Innovation Reinvestment Act (MOSIRA).
“I don’t think the Senate can pass MOSIRA without comprehensive tax credit reform,” said Mayer, a, Dexter Republican. “That was true during the special session, and that’s true now.”
The Senate passed the MOSIRA bill with a contingency clause that said it couldn’t go into effect unless a separate tax credit bill also won approval. Even though the House didn’t approve of the contingency clause, it passed the bill anyway in the hope that it would hold up in court.
But in a ruling Monday evening, Cole County Circuit Judge Dan Green concluded that the contingency clause was unconstitutional and, because he believes it was vital for the legislation to pass and “may well have been a last-ditch attempt to garner enough votes,” the entire fund is unconstitutional.
MOSIRA was designed to shift state income taxes collected on new wages in science and high-tech industries into an investment fund that would be used to help those industries grow. It was one of only two bills passed last fall during a largely unproductive special legislative session called by Gov. Jay Nixon to focus on economic development.
It also was a high priority for the Kansas City area, where leaders saw it as a method to keep Missouri companies from moving to Kansas to take advantage of incentives from a similar fund called the Kansas Bioscience Authority.
House Speaker Steve Tilley, a Perryville Republican, said he was very disappointed with the judge’s ruling, blaming the entire matter on Senate leaders who insisted on including a “fatal flaw” in the bill.
“The House is absolutely ready to fix this and pass MOSIRA again,” Tilley said. “I would hope the Senate would join us.”
Sen. Jolie Justus, a Kansas City Democrat, said she has filed a bill that would reinstate MOSIRA without the clause, although she expects the matter will end up before the Missouri Supreme Court, where she hopes Green’s decision will be overturned.
Green’s decision is a perfect example of why Missouri shouldn’t elect judges, said House Minority Leader Mike Talboy. He, too, expects the Supreme Court will eventually uphold the constitutionality of MOSIRA.
“The easiest solution would be to just pass a clean MOSIRA bill,” said Talboy, a Kansas City Democrat.
Nixon, a Democrat, has called MOSIRA a priority of his administration and has recommended $4 million in seed money for the fund.