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 there.

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 $240 million.

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 Missouri."

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, Quebec.

"We believe that their offer will be a very, very serious and interesting one," Duchesne said.

Stay tuned.

FMI: www.bombardier.com