By Gabe Bullard
Filed Monday, August 13, 2007 at 2:33 PM
When state legislators convene in Jefferson City for a special session next Monday, August 20, they will have a new version of the controversial Economic Development Bill, House Bill 327, to review. HB 327 was vetoed last month by Governor Matt Blunt because of the overall size and cost of the final bill. Labels: State_House, State_Senate
According to House Speaker Rod Jetton, the "Son of 327" will be sent to committee on Tuesday, August 21. Numerous programs, including the Neighborhood Assistance Program, the Small Business Tax Credit and the Youth Opportunity Program, have been removed from the bill to lower its overall cost. But the bill's most controversial part, the Land Assemblage Tax Credit, remains — although it has been reduced from $12 million allowed annually and $100 million cumulatively to $10 million annually and $95 million cumulatively.
The cut is estimated at $70 million, bringing the total cost of the bill to $51 million, not counting the "New Markets" program that begins in two years.
On Thursday, August 16, at 10:00 a.m., State Representatives Jamilah Nasheed and Jeanette Mott Oxford will host a bus tour of the properties owned by developer Paul McKee. McKee, whose companies own more than 500 properties in northern St. Louis, is seen by many as the developer who would most benefit from the passage of HB 327 as it is written.
PubDef will be reporting from the special session in Jefferson City next week and following the negotiations as legislators, lobbyists and residents try to reach a compromise that allows north St. Louis to benefit from needed investment, while not cutting all but just one or two would-be developers out of the project.
Click here for more information on McKee's Blairmont properties.
Click here to watch PubDef's special report on Blairmont.
16 Comments:
Damn! I was just getting ready to recommend to a small STL County nonprofit they pursue an allocation of NAP credits to build their organizational capacity.
Are you saying the revised McKee tax credit plan completely guts the NAP tax credit?
8/13/2007 2:40 PM
On Thursday, August 16, at 10:00 a.m., State Representatives Jamilah Nasheed and Jeanette Mott Oxford will host a bus tour of the properties owned by developer Paul McKee. McKee, whose companies own more than 500 properties in northern St. Louis, is seen by many as the developer who would most benefit from the passage of HB 327 as it is written.
Looking at his properties is pretty much all you need to make your mind up! Hopefully they can get some of the other legislators to actually come along, and not just parrot that "the north side looks like post-war Berlin" line (which McKee's lack of maintenance has certainly helped to exacerbate these last 5 or so years).
I really wish this would work out for the best, but I just don't trust any of these people that much, politicians and developers alike.
8/13/2007 3:16 PM
I as a taxpayer am so damn tired of subsidizing multi millionares like McKee and the Cardinals so that they can make millions more!
8/13/2007 5:30 PM
I'm sure other developers will be happy to hear they can now work in the area, but with no equal incentives. How is that supposed to work?
We don't need Youth Opportunity or Neighborhood Assistance but we do need to pay someone to do what has already been done?
8/13/2007 5:38 PM
This comment has been removed by the author.
8/13/2007 7:46 PM
Why isn't this 100 million being put into existing City programs like the 5K forgivable loans or the healthy home repair program? This way that 100 million would benefit existing responsible City residents, not a blockbusting suburban cutthroat profiteer.
Or, what about taking some of the money and expanding the state historical tax credit program?
Or, taking some of the money for Metrolink and possibly a few St. Louis and Kansas City streetcar lines?
Or, maybe we could use some money to repair troubled SLPS buildings like Cleveland? Perhaps rehab the horribly dilapidated Carr School?
I can think of more reasons why multimillionaire developers, especially those like McKee or Rick Sullivan, who would definitely get in on the action, shouldn't get a tax credit. The citizens of St. Louis could benefit if this money was allocated more responsibly.
Why, in the United States, do the rich pay lower taxes and receive subsidy, when the middle class, and even more so the working poor, are more dependent upon government services? This 100 million should be directed in a manner which benefits the people not the elite.
8/13/2007 7:54 PM
Why does the threshold acreage have to be so huge? I work hard at marketing and selling the LRA buildings in my area, and despite the red tape and paperwork and horrible conditions, they do sell. If I could tell buyers that they could get 100% tax credit for micro-development of let's say at least 4 units, there would be a land rush in North City like we haven't seen since pioneer days. Why cut out the little guy? That is what makes it sustainable development, owner-occupiers and committed landlords mixed in among the live-elsewhere speculators.
8/13/2007 10:29 PM
I like it.
Even 35% of interest and rehab or build costs would cause the rush, and spread them out further, geographicly and otherwise.
35% off a new home? Anyone?
8/14/2007 12:22 AM
...geographically
8/14/2007 12:27 AM
How can I get a ride on the bus?
Don De Vivo
8/14/2007 6:18 AM
This comment has been removed by a blog administrator.
8/14/2007 8:22 AM
Where is the spreadsheet...just a deadlink...
8/14/2007 9:08 AM
Link fixed. Thanks.
8/14/2007 9:41 AM
"How do I get a ride...?"
Get elected and call McKee.
8/14/2007 9:59 AM
> top 5% of income earners in the
> US paid over 50% of the
> individual income taxes.
Yes, but. A big chunk of the income they earn isn't wage income, so they don't pay the flat payroll taxes on it, which come to about 15%. Further, the taxable portion of wages is capped so that the high WAGE earners don't pay the 15% on their whole incomes, but only on a part of it: currently about $90K. The most anyone pays in Social Security and Medicare/Medicaid taxes is about $15K regardless of income. This means "the rich" pay about 1/3 less tax on a chunk of their incomes than the "not-rich" who don't have it in the first place.
This is left over from the idea that Social Security and Medicare are insurance programs, and the tax isn't really a tax but rather a premium. We should get over this, and maybe we can get over it now that most people know that the Social Security Trust Fund is a total fiction — there is no "savings account" with your name on it from which your Social Security check will be cut every month when you retire. That everything you "paid in" has already been spent.
If we can admit that payroll taxes really are taxes, then a better question is "what fraction of all taxes paid are paid by whom?" The answer shows we still have a progressive system, but a lot less progressive than the income tax figures lead one to believe.
Keep also in mind what's meant by "top 1%". Someone who makes about $350K per year is in this group. When they say "the rich" a lot of people mean "top 20%" — this means about $80K, or about twice the median income. This definition catches lots of small businesses (sole proprietorships, S-corps, partnerships).
My own judgement is that we should have a progressive tax system (not a flat tax), and no dedicated income taxes like the Social Security tax. Almost nobody should pay literally nothing, but some people should pay somewhat more than they do now, others somewhat less. All income should be treated equally except that capital gains should be indexed to something and then taxed at the one-and-only rate. We can argue about what the index should be, or whether there should be different indexes depending on asset classes. There should be no property tax, but only an income tax.
The idea is not so much to soak the rich and leave the little guy alone, or to sock it to the nasty corporations. The idea is to discourage people choosing one economic activity over another for tax reasons.
But the middle class ($35 — $75K wage earners) will hate it if I tell them no more mortgage interest deduction, that the value of their health insurance is subject to taxation, and so-forth. Even if they're not hurt overall they'll hate it. The Real Estate industry will say its not fair to tax people on necessities like housing; likewise the health services industry, and the agricultural industry, and so-forth. Why? Because they know you'll pay more for something you're not taxed on than you will for something you are taxed on. The tax break does not flow so much to the wage earner as it does in the form of higher prices than they could get otherwise to the favored industry. And Congress, in good small-d democratic form, will oblige.
And so to propose something like this is political death. Machiavelli was right:
There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.
t
8/14/2007 11:37 AM
Please watch the long links.
8/17/2007 8:06 PM
Post a Comment
<< Home