Political Rewind: Taxpayers to Shell Out $55 Million More for State Pensions
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.
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.
Missouri taxpayers will foot $55 million more next year for state worker pensions.
The governing board of the Missouri State Employment Retirement System, known as MOSERS, has approved a 20 percent increase for the pension program, which funds the retirement benefits for more than 51,000 state workers and 37,000 retirees.
The increase, which takes effect in July, means state residents will pay most of the $330 million for those pensions next year.
The board said the increase was needed because of poor investment returns and longer life expectancies for state workers. Many workers are also delaying retirement, and thus get bigger pensions after working a few extra years.
State Budget Director Linda Luebbering said this increase has been “on our radar screen.”
“That board has been discussing this for a while, and we were aware that the rate would be increasing,” she said.