Tax credit bill to lure China Cargo Airlines to St Louis meets resistance

ST LOUIS, Missouri's scheme of becoming a hub for Chinese air cargo is going to need more state funding to be realised, according to members of the China Cargo Hub project, who promote their "Aerotropolis Tax Credit".


But sceptics, habitually opposed to high-cost mega projects, say they do not want to offer support unless they see some commitment from China or China Cargo Airlines, reported the St Louis Post-Dispatch.


Also competing for China's support in setting up an air cargo hub in the area, is the languishing MidAmerica airport on the Illinois side of the Mississippi opposite St Louis.


Proponents say the Missouri tax concession bill will create up to US$480 million worth of tax breaks over 15 years to spur foreign trade through Lambert-St Louis International Airport.


The measure, proposed by state Republican state Senator Eric Schmitt comes as St Louis enters its fourth year of negotiations with Chinese officials, and more recently, with China Cargo Airlines. Both sides are far apart on costs and the Chinese are reportedly impatient with the lack of progress.


The tax break scheme was devised to meet this situation. But it also comes amid tight state budgets and a pointed debate about tax credits in Jefferson City, the Missouri state capital.


The Aerotropolis package, which would create $60 million in tax breaks for shipping companies that export by air from Missouri, and $420 million in credits to build cargo warehouses and other facilities in certain spots.


It would lower the cost of flights, and help draw more companies to locate around a cargo hub, said lawyer and St Louis China negotiator Steve Stone.


"The mood changed," Mr Stone said. "They see a way here for them to succeed. I think this needs to get done."


The tax break bill has left the Senate's Economic Development Committee having been approved unanimously, but Democratic Governor Jay Nixon has not signed the bill without seeing any indication of interest from China Cargo Airlines.
(Source:http://www.schednet.com)