Mo. House panel adds incentives for data centers to bill offering aid to automakers

By David A. Lieb, AP
Monday, June 28, 2010

Mo. House panel adds data centers to auto bill

JEFFERSON CITY, Mo. — A plan to offer tax incentives in Missouri for automakers picked up a hitchhiker Monday as a House panel added new enticements for computerized data centers.

The bipartisan decision by a House committee came despite a warning from Gov. Jay Nixon’s office that the incentives for data storage centers went beyond the agenda of the special legislative session he called.

If the expanded legislation were to pass, Nixon Chief of Staff John Watson cautioned in a letter to lawmakers, it could trigger a legal challenge and jeopardize the financial incentives for automakers. The primary purpose of the special session is to persuade Ford Motor Co. to keep making vehicles at its Claycomo assembly plant near Kansas City.

Rep. Tim Flook, chairman of the House Job Creation and Economic Development Committee, said he wasn’t trying to sidetrack the automaker incentives. Rather, Flook said he was trying to spur debate on incentives for data centers, which he described as “the next generation in technology growth.”

Flook acknowledged the computer incentives went beyond the scope of special session, but he said he hoped Nixon could be persuaded to expand the agenda.

Under Missouri law, legislators are supposed to be limited to considering topics contained in a governor’s call for the special session. Besides the incentives for auto manufacturers and their suppliers, the only other issue Nixon included in his special session proclamation was an overhaul of Missouri’s retirement system.

The pension changes are intended to save enough money to offset the additional cost of the tax incentives. Senate leaders have said they won’t act on the Ford incentives unless the House passes the pension legislation.

But on Monday, several House members said the two topics had no business being linked.

The House economic development committee adopted an amendment by Flook, R-Liberty, that could financially separate the automaker incentives from the pension changes. Instead of authorizing a new $15 million annual tax incentive for the auto industry, the amended House bill would carve out that amount from the existing $80 million Quality Jobs program for businesses that expand their payrolls.

The potential tax breaks for data storage centers also would be counted against the allotment for an existing incentive called the Enhanced Enterprise Zone program.

The House committee advanced the amended legislation after listening to a couple hours of testimony from city, county and state officials, union leaders and business lobbyists who all said it was essential to pass the automaker incentives.

Ford’s Claycomo plant employs about 3,700 people to assemble F-150 trucks, the Ford Escape and its twin Mercury Mariner, and the Mazda Tribute. The local United Auto Workers president has said Ford plans to quit making the Escape and similar sport utility vehicles there by the end of next year.

Missouri is trying to persuade Ford to retool the Claycomo plant for one of its next-generation vehicles. Although Ford has declined to comment about its future plans, Missouri officials have said Ford will be making those decisions soon and that Missouri is competing against such states as Michigan, Ohio and Kentucky.

“These jobs and these families represent the lifeblood of Kansas City, Missouri,” Mayor Mark Funkhouser told the House committee considering the legislation. “It is urgent. We don’t have years, we have months.”

Rick Woods, a maintenance technician at a Ford supplier in Excelsior Springs, said many companies are dependent upon Ford’s continued production in Kansas City. If jobs are lost at the Ford plant, he said, jobs at other businesses also will go away.

“This is a catastrophic result if this fails,” Woods said.



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