A Senate staff report estimated that giant, 300-page proposal could save the state more than $1.5 billion over a 15-year period by either capping or eliminating a large amount of tax credit programs. Some of the largest cuts deal with tax credits lower-income, elderly leasers and the restoration of historic buildings.
The cargo hub, which would be built at Lambert-St. Louis International Airport, is motivated by interest from a China-based cargo company. The "China hub" proposal offers up to $360 million in tax credits over 15 years to freight carriers, warehouses and other businesses involved in exporting certain products to foreign companies.
The sponsor of the bill is one of the Senate's leading proponents for cutting back tax credits. Sen. Chuck Purgason, R-Caulfield, acknowledged his displeasure with the tax breaks for the China hub, but said it was a compromise to get a much bigger set of tax-credit reductions.
"Sometimes the legislature is a give and take," Purgason said. "We do get budget savings. And if the project [China hub] doesn't work, it doesn't cost the taxpayers anything."
Purgason led an unsuccessful filibuster last year against the governor's plan to provide tax credits to Ford to keep an assembly plant in the Kansas City area.
Sen. Ron Richard, R-Joplin, said he did not know if the cargo hub legislation is going to work but that it was worth a try.
"Nothing ventured, nothing gained," Richard said. "We've got to get in the game...otherwise we are in jeopardy of becoming a second grade state."
Tax credits that would be reduced under the plan include historic preservation projects that has been strongly pushed by developers. The other major reduction would be in tax credits provided to lower income elderly and disabled who rent their homes.
The Senate plan requires a final Senate vote before heading back to the House.