Taxpayers Research Institute Issues Report on Missouri Quality Jobs

The Taxpayers Research Institute of Missouri has issued a report showing the impact of the Missouri Quality Jobs Act. You may access the full report at www.motaxpayers.com - just click on the "Report" tab and then click on the cover of the report.


The report shows the program, originally championed by the Missouri Economic Development Council, has produced fantastic results: 12,500 jobs with an average annual wage of $46,856, returning $3.18 to the state for every dollar of tax money invested.


The MEDC thanks the sponsor of the legislation, Rep. Ron Richards, for his leadership in passing the bill in the House today (see full article below).

Missouri House Gives Final Approval to Quality Jobs and Enhanced Enterprise Zone Bill

(February 22) The Missouri House today gave final approval to House Bill 327, sponsored by Rep. Ron Richard (see detailed article below). The bill received widespread bipartisan support and was approved by a vote of 157-0. The bill will now move to the Missouri Senate for further consideration.

Missouri House Approves Quality Jobs and Enhanced Enterprise Zone Bill

(February 21) Following the lead of the bill's sponsor, Rep. Ron Richard (R-129, Joplin, pictured at left), the Missouri House gave initial approval today to the Missouri Quality Jobs and Enhanced Enterprise Zone legislation - a key part of the MEDC's legislative package for the 2007 legislative session. The bill was approved by a unanimous voice vote. Tax credit limits for both programs are removed in the House version of the bill.


Rep. Richard, who also serves as Chairman of the House Special Committee on Economic Development, said elimination of the tax credit limit was necessary for both programs. "Eliminating the limits on tax credits allows our state and local economic development professionals all over the state to work in a frictionless environment to attract and retain qauality jobs in Missouri", said Richard. "Our economic development professionals work hard to bring good paying jobs to this state and the legislature needs to give them the tools they need."

The Quality Jobs program has created more than 12,500 jobs with above average wages and health benefits in its first 19 months of operation. A study detailing more results of the Missouri Quality Jobs program is expected to be released later this week.

"This program has been an overwhelming success," said Richard, "and I am pleased that my colleagues put aside political differences to pass this quality jobs legislation." The MEDC thanks Rep. Richard, the entire committee and the leadership of the Missouri House for making this bill a priority.

Committees Approve Senate Quality Jobs and House Small Business Development Bills

It was another extremely busy week for our economic development efforts and we are grateful for the attention that the House and Senate committees have shown to the MEDC's legislative agenda.

The Senate Committee on Economic Development, Tourism and Local Government on Wednesday approved the Senate version of the Missouri Quality Jobs and Enhanced Enterprise Zone reauthorization bill. The Senate Committee Substitute for SB 282 , offered by chairman Sen. John Griesheimer (R-26, Washington), provides a $75 million tax credit cap for Quality Jobs, $25 million for Enhanced Enterprise Zones, $12 million annually for a land assemblage tax credit, and extends the expiration date for the New Jobs Training program. The bill was amended in committee to eliminate the exclusion of telephone and cable companies as eligible companies for the Missouri Quality Jobs program and to allow the land assemblage tax credit for smaller areas as well as urban areas. The bill received a unanimous vote from the Senate committee.

The Committee also passed SB 20, a bill that revises tax increment financing procedures. Committee members, including Sen. Jason Crowell, noted that TIF is a tool that can be used well and Chairman Griesheimer agreed. The bill was passed by the committee on a unanimous 10-0 vote.

The Senate committee also heard a bill that would extend the expiration date of the Division of Tourism Supplemental Revenue Fund for five additional years to 2015. That fund receives a portion of the state sales taxes collected from businesses in certain SIC codes that benefit from tourism advertising and uses the money to help fund the Division of Tourism and to help in the promotion of tourism in Missouri. MEDC supported the bill.

Also on Wednesday, the House Committee on Small Business, chaired by Rep. Doug Ervin (R-35, Kearney, pictured at right), heard testimony on Rep. Ervin's HB 365, the Small Business and Entrepreneurial Growth Act, a MEDC priority bill that helps fill the gap for smaller businesses that are adding too few jobs to qualify for the Quality Jobs program. The bill helps small business owners overcome a portion of the additional governmental obligations that are incurred when the business adds employees by allowing the company to retain the withholding tax on new jobs, if they pay at least 85% of county average wage. The business may retain the withholding tax for two years if health insurance is provided for the new employees. The bill was combined with two other bills that were also heard at the hearing: HB 804 (small business investment tax credit) and HB 805 (tax credits for venture capital provided through the Missouri Technology Corporation). MEDC supported all three bills and the committee voted to pass the bills to the full House for debate.

On Tuesday, the House Rural Community Development Committee heard HB 74, sponsored by committee chairman Rep. Larry Wilson (R-119, Flemington, picutred at left) that would provide additional Rural Empowerment Zones in Missouri. The MEDC supported the bill which, if passed, would provide additional tax benefits to help stimulate economic development and job creation in poorer counties with high unemployment and low income. The bill was approved by the Committee and now will be considered by the full Missouri House of Representatives.

Committee Approves Quality Jobs and Enhanced Enterprise Zone Bills

On Wednesday, February 7, 2007, the House Special Committee on Job Creation and Economic Development heard testimony on and approved two bills that are high priority bills for the MEDC: increases in the tax credit limits for the Missouri Qualify Jobs and Enhanced Enterprise Zone programs. In fact, in a show of bipartisan unity, the House committee unanimously passed the reauthorizing bills without a limit on the amount of tax credits that may be issued.

HB 327, sponsored by the chairman of the committee, Rep. Ron Richard (R-129 Joplin, pictured at right) originally would have increased the tax credit limits in the Missouri Quality Jobs Act by $12 million to $24 million. The Department of Economic Development supported this increase in tax credit limit. However, the chairman and many witnesses testifying for the program (including the MEDC) recommended elimination of the tax credit limits. Witnesses testified that the tax credit caps create uncertainty regarding the availability of the program when local economic developers are putting together deals to attract new employers into the state. Following the leadership of Chairman Richard, the committee passed the legislation and removed the tax credit limits. Rep. Richard said the committee's goal is to make this program as frictionless as possible for our economic developers so they may continue to use the program to create quality jobs in Missouri.

Originally passed as a direct result of the efforts of the MEDC and the Department of Economic Development in 2005, the Missouri Quality Jobs Act has created more than 12,000 jobs paying at least county average wage with health insurance benefits since its inception, exhausting the current tax credit cap of $12 million.

The Enhanced Enterprise Zone bill, HB 328, was combined into HB 327, meaning the bill will now include both the Missouri Quality Jobs provisions and the Enhanced Enterprise Zone (EEZ) provisions. The EEZ tax credit limit was also eliminated by the House committee. Click here to view the new bill, including these two provisions and an extension of the new jobs training program.

More than 20 witnesses from companies, agencies and associations testified in support of the two bills at the hearing, furnishing the committee examples of projects that had been attracted using the program. Many also discussed the negative impact the current tax credit limit had on their ability to attract deals because of the uncertainty that exists regarding the availability of tax credits under the program. Thanks to all who made the special effort to attend the hearing in support!

Testifying in support of the bill at the House committee hearing were representatives of the following (listed in order of appearance at the hearing): Missouri Department of Economic Development, Missouri Economic Development Council, Taxpayers Research Institute of Missouri, Associated Industries of Missouri, St. Louis Regional Chamber and Growth Association, Kansas City Economic Development Council, Cape Girardeau Area Chamber of Commerce, America's Heartland Economic Partnership (Lebanon), Joplin Area Chamber of Commerce, St. Louis Development Corporation, Missouri Chamber of Commerce and Industry, Duck Creek Technologies (Bolivar), Marshall-Saline Development Corporation, Jefferson City Area Chamber of Commerce, Economic Development Sedalia-Pettis County, Montgomery City Growth, City of Joplin, EaglePicher Technologies, St. Louis Community College, Missouri Community College Association, Johnson County Economic Development Corporation, Missouri Association for Community Action, Monsanto, Greater Kansas City Chamber of Commerce, Metropolitan Community College (Kansas City), Springfield Area Chamber of Commerce, Northeast Missouri Economic Development.

The Senate Commitee on Economic Development, Tourism and Local Government also held a hearing the same day on similar bills sponsored by Sen. John Griesheimer (R-26, Washington). A committee substitute was presented to the committee that included a land assemblage tax credit, supported by Lt. Governor Peter Kinder and others. Because the bills were heard as part of a docket of many bills at the hearing, those testifying were asked to keep comments brief. The land assemblage tax credit would authorize a tax credit to help offset the costs of assembling large tracts of land for development exceeding 75 acres. The Senate committee took no action on the bills at the hearing.

Missouri Economic Development Code Bill Filed in House

(Feb. 5, 2007) Rep. David Pearce (R-121, Warrensburg) filed the Missouri Economic Development Code bill today. HB 741 is co-sponsored by Rep. Ron Richard, chairman of the House Special Committee on Job Creation and Economic Development.

The MEDCode will allow taxing districts to allocate a portion of their future tax revenues that would result from a project to help finance the project, similar to tax increment financing, but with some important differences. First, all amounts allocated to a project are strictly voluntary. The projects must be public projects (including infrastructure such as streets or publicly owned buildings). Because the program is strictly voluntary, there is no need for a "blight" designation and the program may be used for initial development as well as redevelopment. Also because the program is voluntary, we have addressed objections of school districts to other programs. School districts have objected to having their tax revenue involuntarily redirected without their approval under some existing programs, particularly when the project is a residential project. In a residential project, the school district's workload increases with the number of additional students resulting from the development but the school district receives no additional property tax revenue from such projects. Under the MEDCode, school districts could allocate part or all of their future tax revenue from a project, or nothing at all.

The opportunity the MEDCode will provide for economic developers around the state is obvious. In fact, many local economic developers are already using a similar arrangement and this bill will ensure those developments may continue.

We applaud Rep. Pearce's leadership in filing this important legislation and look forward to working with him for its passage in the coming months.

Busy Week for Economic Development (week ending February 2, 2007)

The House Special Committee on Job Creation and Economic Development held an organizational meeting on Wednesday. Chairman Ron Richard invited Greg Steinhoff, Director of the Department of Economic Development, to share the department's legislative agenda and recent efforts to best utilize the resources of the department to promote Missouri as a great place to do business.

Steinhoff explained the department is now focused on improving the business climate and improving Missouri's ability to compete for business from outside the state, while preserving Missouri jobs, improving Missouri communities through projects like Governor Blunt's Dream Initiative, using the Hawthorn Foundation to enhance recruitment and retention efforts, and efforts to promote entrepreneurship. The director also cited the construction projects that will be funded through the sale of MOHELA assets as a great opportunity to provide an environment for the growth and start up of new companies.

Director Steinhoff asked for the committee's support of the department's legislative package and noted the support and assistance of the Missouri Economic Development Council and other partners in developing legislation the committee will consider beginning next week.

Chairman Richard then invited me to testify regarding MEDC's legislative proposals. I explained the history of the Missouri Quality Jobs legislation for the new committee members and how we had drafted the legislation in cooperation with the Department of Economic Development following the Taimerica study. I explained the Taimerica study had noted the success of similar programs in other states and how we had carefully adapted the program for use in Missouri. Since MEDC and the DED teamed up to pass this legislation in 2005, more than 18,000 jobs have been created or will be created under new projects using the program - a monumental success by any standard. We reiterated our support for the Quality Jobs and Enhanced Enterprise Zone legislation that will be heard in the committee next week (see article below for location and time) and our support for eliminating all caps on these programs.

In other action this week, the Senate Economic Development, Tourism and Local Government Committee heard Chairman John Griesheimer's (R-26, Washington) tax increment financing legislation, SB 20. The bill would restrict the use of tax increment financing in previously undeveloped areas in St. Louis, St. Charles, Jefferson and Franklin Counties and the City of St. Louis. Senator Griesheimer explained the bill was the same bill that passed the Senate last session with the addition of a blight study. He said it was his opinion that if a bill did not pass to restrict tax increment financing in a reasonable manner, an initiative petition may be used to eliminate the use of tax increment financing altogether. He urged the members of the audience to work together to find consensus this year. During debate, Sen. Chris Koster (R-31, Harrisonville) expressed his intent to propose a constitutional change to allow tax increment financing for economic development purposes without a finding of blight. Supporters of Senator Griesheimer's bill included the Kansas City Economic Development Council and the Missouri Economic Development Financing Association. There was no opposition expressed to the committee, although the Missouri School Boards Association testified they would like to see some changes in the bill. The St. Louis County Municipal League testified they would like to see all areas of the state treated equally as the TIF law is changed.

HB 103, a similar bill filed by Rep. Chuck Portwood (R-92, St. Charles) was referred to committee in the House.

The Senate committee also heard SB 89 from Sen. Matt Bartle (R-8), a bill that would exclude headquarters of gaming establishments from eligibility for the Quality Jobs program. Speaking in support of the bill was the Missouri Baptist Convention, Missouri Family Network and Casino Watch. The Missouri Gaming Association and the Missouri Chamber of Commerce opposed the legislation.

In other action, our bill that would exempt sales and leases of property by local governments under Chapter 100 arrangements, HB 130, was referred to the House Ways and Means Committee on Thursday. The bill is sponsored by Rep. Shannon Cooper (R-120, Clinton). The Missouri Department of Revenue recently opined that such arrangements should be subject to sales and use taxes, necessitating the legislation.

I was also privileged to address a group of city and county officials attending St. Charles County Day at the Capitol, sponsored by the municipalities of St. Charles County. I presented a primer on MEDC's 2007 legislative recommendations and answered questions from the group regarding economic development issues.

Regional Economic Development District Bill Filed

Rep. Darrell Pollock (R-146, Lebanon) has filed MEDC's Regional Economic Development District bill that will allow economic development professionals and city and county leaders to use a broader, regional approach to economic development projects that benefit an entire region. The bill is HB 688.

The legislation will allow smaller communities to band together to achieve more than they can achieve on their own. If successful, this legislation will allow city and county governments to cooperate in forming districts, similar to transportation development districts, for economic development purposes. Like transportation development districts, the entire region would benefit from projects undertaken by the districts and financing would be provided by taxes generated within the district. An example of a practical use for this approach is a regional airport or convention center that may attract industry to an entire region.

The MEDC has included this legislation in our legislative package for 2007 and we are excited Rep. Pollock has decided to champion this legislation for us. Rep. Pollock was instrumental in sponsoring and passing the local economic development sales tax in 2005.