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Nixon calls special session to woo Boeing, proposes $150 million a year in state tax breaks

In Backroom

1:28 pm on Fri, 11.29.13

As expected, Missouri Gov. Jay Nixon is calling a special session for Monday afternoon to win swift legislative approval of an incentive package aimed at persuading Boeing to move production of its next-generation commercial aircraft, the 777X.

Among other things, his proposed package appears to include $150 million a year in state tax credits that would be doled out under existing state incentive programs.

Missouri is among several states vying for the aircraft production, in the wake of Boeing's battle with the Machinists Union at the aircraft giant's operation in Seattle. However, some experts have predicted that the 777x operation won't be moved, despite all the scrambling.

Missouri jumped into the fray because St. Louis already has a large Boeing military aircraft production complex, as a result of its merger years ago with McDonnell Douglas.

Jay Nixon
Jay Nixon

The 2013 Special Session is to convene at 4 p.m. Monday. Nixon said in his announcement that the session had to be held quickly because the state’s proposal is due to Boeing by Dec. 10. Because of the legislative process, it will take several days for the General Assembly to take formal action.

“Building this next-generation commercial aircraft in Missouri would create thousands of jobs across our state and secure our position as a hub for advanced aerospace manufacturing – and that’s why I am committed to competing for and winning this project,” Nixon said in a statement. “In order to put forward a competitive proposal on this very aggressive timeline, decisive legislative action is required to add capacity to four of Missouri’s existing economic development programs, which already include strict job creation and investment requirements, so that they can accommodate an aerospace project on this scale.”

Nixon’s statement continued by saying that “the administration continues to work closely with its local partners on a final response,” and that the state’s final proposal “will seek to address the company’s critical needs in worker training, infrastructure development and job creation incentives.”

His proposal calls for legislators to approve “adding additional capacity of up to $150 million annually for large-scale aerospace projects under four of Missouri’s existing economic development programs: Missouri Works, Missouri Works Training, Missouri BUILD, and the Real Property Tax Increment Allocation Redevelopment Act.” 

“It’s important to note that these are the same targeted, fiscally responsible programs that are available to any company creating significant numbers of high-paying, family-supporting jobs,” Nixon said. “This legislation will simply give us added capacity to compete for this type of massive aerospace project, while maintaining existing accountability measures and ensuring a positive return for taxpayers. Aerospace companies like Boeing will have to invest and create jobs in order to earn these benefits.”

He said his administration also is “engaging a consortium of area community colleges to train and certify thousands of additional graduates in aerospace and advanced manufacturing areas to grow a pipeline of highly skilled workers for this project and others in this sector. “

“Boeing has been very clear that the availability of a large, highly skilled workforce is one of the key factors the company will use to determine where to produce its next generation of commercial aircraft,” the governor said. “Especially in technology-intensive industries like aerospace, we’re seeing once again that our human capital is the best economic development tool we have.”

“It’s a real testament to Missouri’s significant competitive advantages that we can put forward a competitive bid for this project without undertaking risky experiments or veering off into uncharted waters,” he concluded. “I look forward to working with the General Assembly to make sure the tools we have in place are ready to bring this game-changing project and thousands of jobs to the Show-Me State.”

There also may be an attempt to toss in a political wrench. State Rep. Eric Burlison, R-Springfield, tweeted on Friday that he'd like to see a "right to work'' proposal included in the mix -- asserting that lower labor costs may be the real key to wooing Boeing.

An attempt to include such a provision -- which, in effect, bar unions from automatically collecting dues from all workers in a collective-bargaining unit -- could set off Missouri labor leaders, who so far have been supportive of the effort to woo Boeing.

It's noteworthy that Burlision's tweet was retweeted by House Speaker Tim Jones, R-Eureka, who has said that a right-to-work proposal will be a key part of his legislative agenda when the General Assembly returns for a new session in January.

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