Missouri Gov. Parson outlines priorities in State of the State address
A group of Missouri Senate Republicans say Gov. Mike Parson is attempting to force passage of his workforce development agenda by falsely claiming that it is essential to persuading General Motors to undertake a $1 billion expansion of its Wentzville assembly plant in St. Charles County.
Parson’s package of tax credit and workforce training programs, the centerpiece of his economic development plan, have proven unpopular with a caucus of conservative senators. They have resisted the proposals for most of the legislative session, which enters its final week Monday.
Tensions over the plan rose earlier in the month when Parson announced GM’s possible $1 billion investment in the Wentzville plant, which employs about 3,500 workers and is in or near the districts of several recalcitrant senators. Parson held up his complete workforce development package as the way to cement a deal with the auto giant.
The senators contend that only a portion of the governor’s plan — $50 million in tax credits — is needed to entice GM.
“They are just trying to pass their agenda,” state Sen. Andrew Koenig, R-St. Louis County, said, speaking of the Parson administration. “They are just trying to latch on to something they feel like people can’t oppose.”
Koenig is a member of the Conservative Caucus, a group of six Missouri state senators who have banded together to block bills they oppose from coming up for a vote on the Senate floor.
The Missouri House passed an incentive package Thursday night. The package needs at least one more vote by the Missouri Senate before the legislative session ends Friday.
Koenig has promised a filibuster of the bill if Missouri Senate Republican leadership won’t allow it to be pared down to just the tax credits.
“If they just did the tax credits (for GM), I’d probably sit down on it and let it pass,” Koenig said.
For the Conservative Caucus, it’s the other two portions of the bill that give them heartburn.
They have been vocal in their opposition to Fast Track, a new $10 million scholarship fund for adults who want to go back to college.
The Conservative Caucus has said the Fast Track will not pass without the attachment of charter school expansion or school vouchers and has pushed for Missouri Works bill to include levying a tax on online sales coupled with a cut to the state’s individual income tax.
They’ve also taken issue with changes to Missouri Works, a $116 million Department of Economic Development program that provides tax credits and relief to companies for capital investment and job creation and retention. Parson has pushed for DED to have a closing fund with clawback provisions so that it can provide the tax incentives up front, instead of upon hitting jobs and capital investment goals.
“I’m not convinced the Fast Track program or the closing fund aspect of the Missouri Works changes are necessary to put a competitive situation in front of General Motors,” state Sen. Bill Eigel, R-Weldon Spring, said Wednesday.
The Parson administration has released few details of GM’s plans. GM did not return multiple requests for comment.
“The governor and our team are not trying to pull a fast one here,” Steele Shippy, Parson’s communications director, said. “We are trying to work as speedily as we can throughout this process while making sure we don’t get ahead of any of the negotiations before we are ready to.”
In an interview Friday, Department of Economic Development Director Rob Dixon, who has led negotiations with GM, said GM has said Missouri is its “preferred location” for upgrading equipment. The deal is by no means final, he said.
Dixon said GM had two other plants, one in Thailand and one in Brazil, that make the same products and other states have plants with “excess capacity.”
The tax credits will allow GM to modernize the plant’s technology, Dixon said. The bill has provisions to claw back the benefits if GM doesn’t retain the number of jobs set in a contract that would be negotiated with DED.
That number has not yet been set, Dixon said. Historically, on average, companies promise to retain 88 percent of jobs in exchange for tax credits. However, on average the companies end up retaining almost 98 percent of jobs, he said.
“What we want to have happen is a company reinvest in their facility, commit to retaining jobs in our state and to make that plant viable for a long period of time — that’s what’s going to happen,” Dixon said. “If they don’t do those things, you can guarantee those jobs will go away.”
Dixon said GM is “extremely and explicitly” interested in another portion of the bill: a skills training program through community colleges called One Start.
“They need immediate assistance on training and retraining for existing employees and will particularly need that when the new equipment and technology comes on board,” Dixon said.
Fast Track helps GM have confidence in the long-term viability of the workforce, Dixon said.
“You can’t pull one of those pieces out of the equation and expect to get the deal done,” Dixon said.
Dixon said GM would not be accessing the Missouri Works deal closing fund, which is why the tax credits for GM will be forwarded through a tax credit program specifically for auto manufacturers.
“The deal closing fund allows us to, frankly, capitalize on this opportunity when GM reinvests in their plant, it will give us the opportunity to attract other suppliers and other businesses to the state,” Dixon said.
State Sen. Bob Onder, whose district includes the GM plant, called the Missouri Works closing fund “a slush fund.” Similar funds in other states have promoted the perception of “pay to play” when tax credit deals coincide with campaign contributions, he added.
“GM has been very clear in what they need in terms of economic incentives and workforce incentives,” Onder said.
“(The Missouri Works closing fund) has nothing to do with the GM deal. That’s just something the governor has been asking for all session.”