Repercussions loom in Missouri’s failed courting of Boeing

01/05/2014 5:23 PM

01/05/2014 9:56 PM

Kansas City should remain leery and watchful of the genie that Missouri politicians let out of the bottle while courting Boeing.

Gov. Jay Nixon offered up cuts to tax credits for low-income housing and historic redevelopment to grease the cooperation of conservative legislators. The cuts were to partially offset Missouri’s offer of up to $1.7 billion in incentives to Boeing.

First, realize that Missouri’s pitch for some of the production of the Boeing 777x was unlikely to be successful. Many other states were in the mix (about half of the country), and the process was more about Boeing building leverage against the Machinists union.

On Friday, the union caved. The International Association of Machinists and Aerospace Workers approved extending their Seattle contract for another eight years. The vote was 51 percent to 49 percent. It was a squeaker that left deep fractures among union membership and leadership, and illustrated how far a profitable company can go in pressing its workforce to cough up benefits. Pensions were frozen in the concessions to keep the jobs in Washington state. But the fallout won’t only be in Puget Sound.

Nixon put on hold until March final approval of tax credits for projects intended to help homeless veterans in Kansas City and other neighborhood redevelopment plans. Kansas City Mayor Sly James and a range of other politicians cried foul.

Missouri loses more than $500 million in revenue every year through tax credits being redeemed. About $223 million are for low-income housing and historic building purposes — long a sore spot for some of the state’s conservative senators.

Deciding what is fair won’t be an easy undertaking if done honestly. We need some standards about what constitutes corporate welfare, what just helps a business avoid any risk, which credits are really necessary to make difficult urban redevelopment projects feasible and deep scrutiny of the long-term impact of the subsidies on taxpayers.

Otherwise, Missouri’s ability to get its offer together for Boeing has drawn mostly kudos.

Gee, wasn’t it great that the legislature could come together in a special session, working quickly and efficiently to put Missouri in the running?

That’s how they should always perform. It’s sad that the general public is resigned to the opposite being the norm.

Let’s see how well they can function when the job of reforming tax credits gets raised again. Stay tuned, it will.

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