JEFFERSON CITY, Mo. — State senators worked to strike a late-night compromise on tax credit reform and measures to jump-start the economy on the eve of the 2009 legislative session’s end.

The Thursday night talks came after leaders in the House held up health care legislation as hostage for movement on an economic development bill. The House has passed multiple bills that would expand various tax credit programs, but a group of seven senators have blocked the bills, calling for caps and other restrictions on the incentives.

Sen. Brad Lager, R-Savannah, helped craft what many expected would serve as the compromise on the bill. “This is a bill that nobody loves, but it’s my belief everyone can live with,” Mr. Lager said.

But heavy debate continued Thursday morning and afternoon, putting passage of the bill by today into question. Legislators adjourn for the year at 6 p.m.

“If you’re not getting a tax incentive, you’re paying for somebody else’s tax incentive,” Sen. Matt Bartle, R-Lee’s Summit, said. Mr. Bartle and other critics contend the state’s budget won’t be able to sustain the growth of tax credits in future years.

Of particular contention was the Historic Preservation Tax Credit program, which receives no legislative oversight and has exceeded $160 million annually.

One of the most vocal critics of the program to restore old buildings, Mr. Lager, wanted to limit the credit to $100 million or less throughout the session. But by Thursday, senators volleyed back and forth between $140 million and $150 million.

“We’re $10 million apart on a resolution,” Senate President Pro Tem Charlie Shields, R-St. Joseph, said.

Absent from the attempt at compromise was a key reform from Sen. Jason Crowell, R-Cape Girardeau, that would’ve funneled all tax credits through the legislative budget process.

The version does answer Gov. Jay Nixon’s State of the State request for an expansion of the state’s most popular incentive for employers, a Quality Jobs program that now has a cap of $60 million. The substitute bill ups the cap to $80 million.

Legislators went into recess at about 7 p.m. to conduct private negotiations, but they didn’t reach a public solution by 11 p.m. Senate Majority Floor Leader Kevin Engler said one would come within the hour.

Meanwhile, House leaders continued to delay a legislative conference on a key health care bill that would expand state coverage to low-income Missourians who have problems getting insurance. Mr. Shields said the House would relent once the Senate passed a jobs bill.

Even if a final compromise were to be reached later Thursday, legislators will have to work fast today to move either of the bills to the governor’s desk. The full Senate must pass the jobs bill and send it to the House, which also must pass it. If there’s any disagreement, both sides will have to negotiate and then both chambers will have to back the changes.

Conference negotiations still must be completed on the health care bill, and then both the House and Senate have to approve the changes.

Alyson E. Raletz can be reached

at alysonraletz@npgco.com.