.

Political Rewind: Missouri Tax Incentives Too Sweet? Auditor Thinks So

Patch prides itself on local coverage, but Missouri politics can have just as much an effect as local government. Here's an easy guide to what happened this week on the state political scene.

Editor's Note: This article was created by aggregating news articles from Missouri Watchdog.

Treasurer hopefuls agree: Get real with rate of returns on pensions

Missouri’s current public pension costs are ballooning at an alarming speed, fueled by increased benefits calculated on too high an assumed rate of return on investments.

That’s one issue the two candidates for Missouri treasurer can agree on.

The governing board of the Missouri State Employment Retirement Systemagreed on a $55 million increase next year to cover an expected shortfall in the fund. Members said poor investment returns and longer life expectancies are draining the fund.

Taxpayers are expected to cover $330 million to MOSERS in 2013. Employees only contribute 4 percent of their salary toward retirement benefits.

State Treasurer Clint Zweifel was the lone board member to vote against the increase. He said the board needs to overhaul the system, because even the $55 million increase may not be enough to shore up the deficit.

- - - - - 

Romney’s debate win not unexpected for a presidential challenger

Most pundits gave the edge in Wednesday night’s presidential debate to Republican Mitt Romney, but a University of Missouricommunications professor said that comes as no surprise.

“In some ways last night we saw a typical incumbent-challenger debate,” said Mitchell McKinney, a MU debate expert.

Most recent polls have shown Romney falling behind President Barack Obama, particularly in the key swing states. McKinney said the GOP challenger appeared aggressive and urgent against the Democratic incumbent.

“What magnified the contrast was Obama’s professorial approach,” McKinney told Missouri Watchdog. “Romney looked more focused. To viewers it seemed like he was coming out of the gate and taking it to the president.”

Therein lies a certain advantage for the challenger. McKinney noted an incumbent has to run on his record, and a challenger can attack the areas in which a president has failed, such as Obama’s inability to reduce the national deficit.

- - - - - 

Show Me State debt nearly $30K per private sector worker

Got 300 Benjamins stuck in your couch cushions? If so, you could help pay your share of Missouri’s debt.

The average state debt is $29,377 per private worker in the Show Me State, according to a recent analysis by State Budget Solutions.

Factor in all of Missouri’s 6 million residents into the equation and the debt per capita is $10.946.

The third annual report from this nonpartisan project of the Sunshine Review found state governments are facing more than $4 trillion of debt.

The debts include such things as budget gaps and outstanding bonds, but the most crushing issues are unfunded pension liabilities. In Missouri, for example, retirement benefits for public workers make up $56.8 billion of the $65.8 billion total debt the group calculated for the state.

The study noted that Missouri’s 2.23 million private-sector workers are at increased risk because they are the ultimate tax base for reducing the state’s debt.

- - - - - 

St. Louis should pay back HUD, auditors say

The U.S. Department of Housing and Urban Development’s audit team doesn’t like the way St. Louis used some of its stimulus money, and it wants the money back.

HUD’s auditors also knocked the city’s lack of transparency in how it reported the use of the money. This complaint comes in a public audit from HUD that contains plenty of redacted and vague information.

In a report released Thursday by HUD’s Office of Inspector General, the city’s Office of Community Planning and Development was criticized for awarding two contracts for nearly $1.4 million without accepting bids.

That St. Louis department also did not ensure that people who received work through the contracts were paid adequate wages and failed to file timely reports updating use of the American Recovery and Reinvestment Act money with FederalReporting.gov, according to the audit.

The auditors’ biggest issue was with how contracts were awarded for $1.1 million in work on the rehabilitation of a community center and $275,000 for various public works projects.

- - - - - 

GOP jumping back on Akin bandwagon

Now that Todd Akin’s staying in the U.S. Senate race, some in the Republican Party are giving the Republican candidate a figurative slap on the back rather than a kick in the behind.

Rob Jesmer, director of the National Republican Senatorial Committee, a political action committee focused on electing GOP members to the Senate, called Akin “a far more preferable candidate than liberal Sen. Claire McCaskill.”

Jesmer’s new stance is quite the opposite of where he stood last month at the Republican National Convention in Tampa, Fla. There, he said Akin was “not a suitable candidate for office right now … There’s not one poll that suggests he can win,” the St. Louis Post-Dispatch reports.

Despite his renewed support for Akin, Jesmer stopped short of pledging much-needed funding to Akin’s campaign.

NRSC certainly has financial firepower. This super PAC has raised $81 million for the 2012 election cycle and spent just $52 million of it, the latestFederal Election Commission reports show.

Akin got the collective cold shoulder from the Republican Party after his controversial comments about rape and pregnancy drew the ire of the nation. Many in the GOP, feeling that Akin could not defeat McCaskill after his misstep, asked him to withdraw from the race. This included not only top Republicans in Missouri, but presidential candidate Mitt Romney.

- - - - - 

State’s tax incentives a bit too sweet, auditor says

Democratic Gov. Jay Nixon’s Department of Economic Development and its lucrative tax incentives have led, in part, to a failed industry and a CEO facing criminal charges, state Auditor Thomas Schweich says.

Schweich, in a report released Wednesday, says the DED’s division of Business and Community Services“failed to perform due diligence” on various projects, including the recruitment of Mamtek USA to Moberly.

The company planned to build a sucralose manufacturing plant in the southeast Missouri city, and was promised $17.6 million in tax breaks. Nearly $70 million in bonds were issued for the plant’s construction, but it never opened and Mamtek filed for bankruptcy in January. Sucralose is an artificial sweetener.

The company’s CEO, Bruce Cole, is in an Orange County, Calif., jail awaiting extradition to Missouri to face four felony fraud charges. plus another felony charging him with taking $700,000 from Moberly’s bond funds.

In a written response, the DED said that no tax incentives were awarded to Mamtek because the company failed to create jobs.

Schweich said Missouri allows developers to stack tax credits without generating additional economic activity to benefit the state.

Missouri Watchdog reported this practice in June, noting that a Ford supplier would benefit from $5 million in tax incentives through four separate state programs to build a plant in Liberty.


 


 


 


 


 


 


Boards

More »
Got a question? Something on your mind? Talk to your community, directly.
Note Article
Just a short thought to get the word out quickly about anything in your neighborhood.
Share something with your neighbors.What's on your mind?What's on your mind?Make an announcement, speak your mind, or sell somethingPost something
See more »