JEFFERSON CITY — A year after stripping it from a package of taxpayer-paid incentives for Missouri’s agriculture industry, a controversial rural tax credit program is back before the Legislature.
A House panel Monday heard testimony on the proposed Missouri Rural Workforce Development Act, which is designed to give investors tax credits for investing in rural businesses in the state.
“We’re really looking to get money into rural parts of the state that have been left behind,†said Rep. Kurtis Gregory, a Marshall Republican who is sponsoring the $25 million proposal.
Efforts to approve the program stalled in 2021 and again last year amid concerns that the program could benefit a major Missouri property developer.
And, on Monday, Democratic lawmakers continued to raise questions about the plan based on cost overruns in a similar program in Georgia.
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A state audit in Georgia found the rural investment program would take at least 72 years for a return on the investment, leading to charges that it is an expensive boondoggle that lines the pockets of developers.
Rep. Patty Lewis, D-Kansas City, questioned the $25 million price tag.
“That is super-concerning to me,†Lewis said.
She also said the qualifications required for potential participants appear to have been written to favor particular companies.
“It sounds like it’s tax credits for the wealthy companies,†Lewis said.
Among the companies involved in the Georgia program is JES Holdings, led by Jeffrey E. Smith, a Columbia developer who is a major player in the state’s low-income housing tax credit program. His firm also has offices in Georgia.
A subsidiary of JES, known as Affordable Equity Partners, is represented in the Capitol by lobbyist John Bardgett and three members of his firm.
Bardgett also represents the ºüÀêÊÓƵ Cardinals, Anheuser-Busch and a host of industry trade groups.
ºüÀêÊÓƵ-based Advantage Capital Partners also is pushing for the program.
Rep. Michael Burton, D-Affton, said he’d prefer the tax credits going to help more “mom and pop†businesses than companies with fewer than 250 workers.
Under the proposed program, participation would be limited to a narrow number of firms. For example, investors would have to had put at least $100 million in small communities across the country, including $30 million in Missouri.
The bill requires 70% of investments to be made in rural small businesses with 250 or fewer employees.
“To me, this seems to be for the big boys,†Burton said. And, he added, “This does kind of mess with the free market.â€
Advantage representative Alex Stepanek said the high threshold is designed to ensure the programs will get off to a fast start, allowing the state to see a return on its investment.
“These are companies that have the financial wherewithal,†Gregory said.
Sam Licklider, lobbyist for the Missouri Realtors Association, said the program could help renew hollowed out parts of the state.
“It’s tough to expand in small town Missouri,†Licklider said. “We look for anything that will give opportunities to rural Missouri.â€
“I’m all for giving Missouri an edge when we can,†Rep. Willard Haley, R-Eldon, told fellow members of the House Rural Community Development Committee.
Last year, the legislation was removed from a larger package of tax credits for wood energy, meat processing, ethanol, biodiesel and a loan program for family farms after the potential costs raised eyebrows among lawmakers.
The tax credit system in Missouri has long been controversial.
During his short tenure, former Gov. Eric Greitens moved to kill hundreds of millions of dollars in the state’s tax credit programs, saying they only benefit banks, investors and lobbyists.
Greitens later blamed the industry for helping to orchestrate his ouster in 2018.
It took three years for the state’s low-income housing tax credit program to restart under Gov. Mike Parson.
The legislation is .