The Governor’s Revealed Preference
According to his biography:
Governor [Jay] Nixon has put forward an agenda to make government more efficient, effective and responsive to the needs of Missouri families. He is committed to […] placing a college education within reach for middle-class students.
The governor’s budget decisions, however, send the message that his priority is big businesses that have lobbying power — not students, not low-income or middle-class families, and not people who have mental illnesses or disabilities.
Just last week, the governor cut from the state budget hundreds of millions of dollars from programs that benefit these disadvantaged groups, including transportation aid and college scholarships. He says that the state government is strapped for cash and has run out of programs to cut, but then he doles out hundreds of millions in tax credits to big companies like Ford and IBM. As Martha King wrote yesterday, it’s nonsense.
Every day, it seems, there is a new company and/or industry seeking a handout from the Missouri state government, which is eager to oblige. According to the Columbia Daily Tribune (link via John Combest), the proposed beneficiary du jour is data centers:
Rep. Tim Flook, R-Liberty, submitted an amendment Monday afternoon to expand the bill offering incentives to Ford Motor Co. to include new incentives for data centers.
I’ve argued previously that offering state tax credits to data centers is not good policy. To make the situation worse, as part of the proposal, any data centers that locate in state will contribute zero revenue to the state:
Flook’s amendment, which passed out of the committee by a vote of 14-1 with one abstention, would give a sales tax exemption on the utilities for data centers. It also would exempt retail sales of certain tangible personal property and materials from sales tax if they are for facilities used by data storage centers and server farm facilities. A fiscal note outlining the cost to the state has not been attached yet.
By carving out sections of the tax base, the state government shifts the tax burden to those who remain. This leaves those who lack lobbying power to pick up the tab. The businesses that locate in Missouri as a result of this proposal will still consume services from the state government, but they won’t have to pay for them. (The rest of us will.)