Friday, July 6, 2007
Contact: Jessica Robinson, 573-751-0290
Blunt Vetoes Giant Bill Packed with Excess Spending
Governor Says Good Wages, Health Care Are Quality Jobs 'Musts'
JEFFERSON CITY – Gov. Matt Blunt today vetoed tax-credit legislation that came to his desk loaded down with excessive spending, including incentives for businesses that fail to pay average or above-average wages and fail to provide employees with health coverage.
In vetoing House Bill 327, the Governor said he is prepared to summon a special legislative session if legislative leaders are willing to pass a more restrained bill that will achieve the good objectives of this legislation such as expanding the successful Quality Jobs program - while setting aside special projects and excessive spending items.
The vetoed bill would have spent an estimated $200 million in excess of Quality Jobs reauthorization, and there were unknown expenses associated with the legislation that could cost Missourians even more. The legislation drew Blunt’s veto after growing large and expensive with a laundry list of projects that included creation of an “eminent domain train,” tax breaks for “phantom flights” to Europe and a provision that would harm many existing Missouri employers by putting them at a competitive disadvantage.
“There are important initiatives in the bill,” Blunt said. “The Quality Jobs Act we created in 2005 has helped Missourians create more than 94,000 new jobs since 2005. Ultimately, however, it became loaded with excessive spending that simply does not benefit the average Missouri taxpayer. There is no difference between spending taxpayer dollars by appropriations and spending them by tax credits. Each should meet the same test of fiscal responsibility.”
“I am committed to signing a fiscally responsible expansion of Quality Jobs, Enhanced Enterprise Zones and the New Market Tax Credits. The savings from a sounder bill will benefit the state for decades to come,” Blunt added.
Among the sections identified as problems by the governor:
Jobs and Health Care
Of greatest concern to the governor, the vetoed bill allowed Quality Jobs tax incentives to go to businesses that pay employees less than the average county wage and, more significantly, do not offer health care coverage to their employees. Governor Blunt created the Quality Jobs Act to help generate new family-supporting jobs with good pay levels and health coverage, but the vetoed legislation would have provided the same benefits to businesses that pay lower wages and do not offer health care.
“I will insist that job-creating incentives be provided to employers who pay at least average wages and provide health coverage,” Blunt said.
Eminent Domain Trains
Another part of the bill sought to provide eminent domain power at the behest of a Colorado company that is seeking rail tracks and other property to run “historic rail cars” as excursion entertainment.
Blunt had three objections to the provision. First, it provided a public bounty for dinner theater trains, an activity that offers, at most, the very smallest of effects on the economy. Second, it could complicate the governor’s plan to expand the Katy Trail on the Rock Island rail corridor. Third, Blunt said the state must not slide down “the slippery slope” of piecemeal awards of the power to take private property against an owner’s wish. Last year, Blunt signed into law one of the nation’s strongest safeguards for private ownership, which was endangered by the U.S. Supreme Court’s pro-taking decision in Kelo versus New London, Conn.
Blunt said, “We must not extend the power of eminent domain at the very time we have been successfully restricting it.”
Phantom Flights to Europe
Blunt said transportation infrastructure improvements would have suffered from a new aviation fuel tax exemption offered for non-existent, future international flights that originate in Missouri and cross an ocean. The Missouri Department of Transportation opposed the provision and said transportation improvement would lose $400,000 in revenue.
Blunt said, “At present, no transoceanic flights originate in Missouri. Of additional concern, as written, it is possible that airlines could claim the exemptions for flights that merely connect with trans-ocean flights in U.S. cities in other states.”
Hurting Established Employers
The governor also expressed concern with a change in state tax laws that could cause established Missouri employers, particularly distribution companies, to operate at a competitive disadvantage. House Bill 327 would give tax breaks to new distribution companies, while denying the benefit to existing businesses.
Summary
“We have established a new economic climate that allows innovative Missourians to more easily create new jobs and quality jobs in high numbers, attracts new businesses, and strengthens established employers,” Blunt said. “The new direction in our economy relies on the enterprising spirit of the people and the Missouri work ethic. New state policies are supporting and empowering this growth by balancing a budget that was $1 billion in the red when I became governor, by establishing clear incentives for high-quality, family-supporting jobs with health care coverage, and by protecting our small business owners and large employers from the long-ignored threats of frivolous lawsuits and other regulatory burdens.”
Since taking office Blunt has made it priority to restore balance to the state’s budget. Overcoming an inherited $1 billion deficit he was able to balance the state’s budget, make important investments in Missouri’s future and secure $200 million for priorities like education and health care in future fiscal years.
The governor signed budgets that include more than $675 million in education aid to benefit Missouri students of all ages including more than half a billion dollars for K-12 education. His Lewis & Clark Discovery Initiative generates an additional $335 million to strengthen Missouri’s colleges and universities. Blunt secured these significant increases without a single penny of job killing new taxes.
The governor has helped create a jobs climate that has enabled Missouri employers to create more than 94,000 new jobs since January 2005.
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