Fewer Tax Credits Help Sway Lawmaker Support
Missouri lawmakers have reduced incentives to attract Bombardier
Aerospace to the Kansas City area. But that doesn't mean they're
giving up on luring the Canadian planemaker to open a plant
The Associated Press reports state legislators passed a new plan
Thursday, calling for the state to front significantly less money
in tax credits to Bombardier, in exchange for lower royalties.
Supporters hoped the revised plan, which would also reduce taxpayer
risk, would sway on-the-fence lawmakers to support the measure.
As ANN reported in March,
Bombardier is considering Kansas City as the manufacturing site for
its upcoming CSeries passenger jet. State leaders say the plant
would eventually employ up to 2,100 people directly, and indirectly
generate more than 5,000 more jobs at other area employers.
As part of both the original plan and the new proposal,
Bombardier would front the $375 million to build the new facility,
with the state kicking in tax credits after that. Instead of
granting tax credits of up to $40 million annually for 22 years
however, the new plan caps credits at eight years, totaling
It also calls for those payments to stop if Bombardier fails to
repay the state aid, plus a 5.1 rate of return. The state would
then collect a fixed percentage of the cost of each CSeries jet the
planemaker sells from the Kansas City plant, until Bombardier's tax
credits are paid off.
Missouri Department of Economic Development Director Greg
Steinhoff notes under language the old plan, the state could have
collected those payments indefinitely... making the new deal an
all-around better deal for all parties. He called the new deal "an
extraordinary economic development opportunity for the state of
Bombardier spokesman Marc Duchesne said Thursday the planemaker
is still very interested in Missouri, although Bombardier has said
before it would prefer to keep the plant closer to home in Mirabel,
"We believe that their offer will be a very, very serious and
interesting one," Duchesne said.