Missouri governor allows more spending, property tax cap as he pursues stadium deal

Yahoo

2 days ago

State Sen. Kurtis Gregory of Marshall is sponsoring the bill to set aside state tax money to finance new and renovated stadiums for Kansas City sports teams (Annelise Hanshaw/Missouri Independent).
Gov. Mike Kehoe expanded the agenda of the special session Wednesday enough to win Missouri Senate passage of bills with money for disaster recovery in St. Louis, changes to property taxes policies and tax incentives to finance new or improved stadiums in Kansas City.
Initially scheduled to go in at 10 a.m., the Senate finally convened about seven hours later. Talks over what sweeteners Kehoe needed to get his key objective — tax incentives to finance new or renovated stadiums for the Kansas City Chiefs and Royals —- culminated in his revised agenda.
'After productive conversations with members of the Missouri General Assembly this week, we are amending our special session call to allow for additional legislation in the areas of disaster relief, tax policy, and budget investments,' Kehoe said in a news release. 'We appreciate legislators working together to use this as an opportunity to show up for our communities by acting swiftly to help those in crisis, while also making smart decisions that secure opportunity for the future.'
Under the constitutional limits on a special session, the governor must 'state specifically each matter on which action is deemed necessary.' Any attempt to address an issue not listed in the call for the session can be ruled out of order.
The special session began Monday and can continue for up to 60 days. Kehoe is seeking quick action because both teams have offers from Kansas to relocate.
The spending bill passed 23-10 in the early morning on Thursday, winning with a coalition of Democrats and Republicans with only Republicans opposed. The bill to finance the stadiums went to the House on a 19-13 vote, with three Democrats joining 10 Republicans in opposition.
For several hours the chamber stalled on the stadium bill, working late into the night. The bill includes all the tax provisions necessary to finance the stadiums, plus disaster relief provisions and an expansion of a tax credit program supporting amateur sporting events.
Shortly before 1 a.m., the impasse cleared and bill sponsored by state Sen. Kurtis Gregory was given initial approval. Within a few hours, the final votes were held and the Senate adjourned until June 16.
For several hours, debate focused on a proposal from state Sen. Joe Nicola, a Republican from Independence, to freeze the maximum increase in annual property tax bills at 5% in some counties.
Then state Sen. Tracy McCreery, a Democrat from Olivette, said she had heard enough.
'This discussion that we've had the last several hours is just an effort for the governor to try to get a couple of votes out of the Freedom Caucus for the stadium funding scheme,' McCreery said.
She said Kehoe agreed to Nicola's amendment and added it to the call to wear down opposition. Then she blamed Kehoe and Republicans for using a procedural move to shut down debate during the regular session on an abortion ban and repeal of the sick leave law approved by voters in November.
Kehoe could have had the stadium plan passed if the procedural move was not used, McCreery said.
'Here we are tonight, masquerading that we care about people and the amount of money that they're paying for things,' McCreery said.
Democrats don't trust Republicans, she said, and the Senate should not trust the House. Until the appropriation bill, which totals $361 million including $175 million in general revenue, passes the House.
The House refused to pass a bill with $235 million of the same projects and $282 million of additional spending during the session. House Republican leaders waited for the Senate to adjourn on the last day for passing appropriations before revealing that the bill would be spiked.
'We should not be doing anything until (the spending bill is passed) and over the House, and then the House has to have it on its way to the governor before we should be taking any action on anything else,' McCreery said.
The stadium funding plan would allocate state taxes collected from economic activity at Arrowhead and Kauffman to bond payments for renovations at Arrowhead and a new stadium for the Royals in Jackson or Clay counties.
The cost is estimated at close to $1.5 billion over 30 years.
State Sen. Kurtis Gregory, a Republican from Marshall and sponsor of the stadium bill, said the public support for keeping the Chiefs and Royals in Missouri was both a good economic investment and a good investment in the state's image.
'What's at stake if those teams go across the state line is over $2 billion of economic activity inside of the state of Missouri, over 13,000 jobs, and we just let the state of Kansas poach the pride and joy of the western side of the state,' Gregory said.
The teams must give Kansas an answer by June 30 on an offer to pay 70% of the cost of new stadiums. Missouri's offer is to cover about half the cost.
Some senators have grumbled that the teams should make a commitment to stay in Missouri if the bill is passed. Gregory said their desire to stay should be apparent.
'I also contend that the teams want to stay in Missouri, because if they wanted to go to Kansas, I believe they would have already signed on the dotted line to move those teams,' Gregory said.
The spending bill was increased because of demands from St. Louis Democrats that Kehoe address the uncertainty over when or whether President Donald Trump will declare a federal disaster for the May 16 St. Louis tornado.
That brought a new $100 million appropriation for storm victims in the city of St. Louis. Previously, the disaster provisions in the call — $25 million for the Missouri Housing Trust Fund to be distributed by the Missouri Housing Development Commission and a tax credit for amounts paid as insurance deductibles — were all applied equally to counties included in disaster requests. Kehoe has submitted four storm events this spring, with damage in 37 counties, to Trump for disaster requests. Two have been granted.
The magnitude of the St. Louis tornado — a 22-mile path of destruction that cost five Missouri lives and damaged an estimated $1.6 billion in property damage — surpasses all other damage so far in the state.
Damage to public property in the two disasters that have been declared is estimated at $52 million.
The other new money added to the spending bill settled an issue for state Sen. Stephen Webber, a Democrat from Columbia. A state contribution to the new research reactor at the University of Missouri, which Kehoe cut from $50 million to $25 million to find money for disaster aid, was returned to $50 million.
The only opposition to the spending bill on the floor came from state Sen. Mike Moon, a Republican from Ash Grove, who said the university should tap its $1.4 billion endowment to pay for the reactor.
And Moon said he didn't like the disaster relief funds.
'The money that is going to be received by those who were hurt is nowhere near the amount that's going to cause them to be compensated and fully restored,' Moon said.
If the state starts paying to repair property after storms, he said, people will not buy insurance.
'I don't think some of this is the proper function of government,' Moon said. 'Compassion, certainly. But unless people take personal responsibility and do the things they should be doing so that we don't have to, when is this going to end?'
The tax change Nicola is trying to enact would cap increases in real property tax bills at 5% every two years, corresponding to the reassessment cycle. Officials in 34 counties would have the option of putting the cap in place through a ballot measure.
The proposal is a response to rapid increases in property values and the resulting increase in tax bills. There was no estimate available of the potential cost to local governments. Nicola said there were enough protections to make sure all current revenue is maintained and new voter-approved levies are paid.
'Our property tax system in this state, in my opinion, is a disaster,' Nicola said.
The amendment is the price of his vote, he told the Senate.
'I am a hard no on the stadium tax bill unless we get some solid property tax relief for my people in Jackson County,' Nicola said. 'I told the governor of this on Monday I can count on one hand how many of my constituents want me to vote for the stadium.'
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