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Lager’s push to repeal some tax credits met with criticism
by Alyson E. Raletz
Wednesday, April 2, 2008

JEFFERSON CITY, Mo. — A local lawmaker tried to kill several tax credits Tuesday. Another attempted to revive a credit with heavy ties to St. Joseph.

The state issued $493 million in tax credits in 2006. In 2007, the state issued $703 million in tax credits. And more than $810 million is expected in 2008.

One of the Senate’s most vocal opponents of tax credits, Sen. Brad Lager, R-Savannah, said he believes the state budget faces serious dangers at the hands of the incentives.

“Unfortunately, we view tax credits as this limitless pot ... but the reality is (these) are finite dollars,” Mr. Lager told a Senate ways and means committee Tuesday.

He asked the committee to support his SB 1220, which repeals certain tax credits he said were minimally used, if at all, such as the manufacturing and recycling cellulose casing and the sponsorship and mentoring tax credits.

It also would sunset any credits to the wood energy tax credit program, which helps sawmills purchase and maintain pollution control equipment.

The latter provision drew staunch criticism from its users.

“It is ... used in rural Missouri where jobs are hard to come by,” said Brian Brookshire of Missouri Forest Products Association.

Mr. Lager said the credit was created to helps mills transform waste into wood pellets, which over time, have become more valuable. He questioned whether taxpayers should continue to subsidize the industry’s profitable operation.

The bill also requires all legislators to claim any tax credits with the Missouri Ethics Commission.

Mr. Lager’s plea came minutes after a St. Joseph Republican proposed the reinstatement of a tax credit that expired in 2005.

Sen. Charlie Shields, R-St. Joseph, wants to bring back tax credits for qualified research expenses, including research and development of biotechnology, plant genomic products and prescription pharmaceuticals consumed by humans or animals.

Mr. Shields argued in favor of the credit because “at least in my neck of the woods, we are seeing the growth of (an) animal life sciences corridor,” which he explained ran from St. Louis to Columbia to Kansas City, up to St. Joseph and then over to Manhattan, Kan.

Boehringer Ingelheim Vetmedica’s primary animal vaccine research facility is located in St. Joseph. Its products benefit livestock producers.

The company’s executive director of business development testified in support of the credit, saying the research climate in Missouri is important to Boehringer, since the company would like to add more world-class scientists to the organization.

“Anything able to make us grow our infrastructure here is very important to us,” he said.

Mr. Shields’ bill would increase the credits’ prior $9.75 million cap to $10 million annually. The bill provides dollar-for-dollar credits for research expansions. No money goes toward research that already exists.

The bill’s sole opponent came from Missouri Right to Life, whose representative, Susan Klein, contended the credits could aid in human cloning research.

Committee members unanimously approved Mr. Shields’ bill in a 6-0 vote Tuesday. It could come up for floor debate in coming weeks.

The committee may consider Mr. Lager’s tax credit repeals at a future meeting. Mr. Lager based his legislation on findings from the Joint Committee on Tax Policy.

Alyson E. Raletz can be reached at alysonraletz@npgco.com.

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