By Greg Steinhoff, Director
Missouri Department of Economic Development

Since I have only been serving as director of the Missouri Department of Economic Development for the past four months, this column may be our first point of contact. But I can assure you it will not be our last.

The work of our department is to help Missouri businesses grow, attract new business to the state and strengthen our economy through new job creation and investment in our communities. I do not believe that can be accomplished from behind a desk in Jefferson City. I want to see what's working well around our state so those good ideas can be shared. I want to hear what's not working so we can help fix the problems. I want our department to be a partner to your local businesses and communities, moving
worthwhile projects along. That requires a lot of travel around our state. So you may be seeing me soon in your community if you have not already. In the meantime, I will be communicating with you about the good work we are doing in our department and all the good ideas I am hearing during my travels through this monthly column in your local newspaper.

As you can imagine, convincing companies to start up or relocate in our state is a highly competitive process. Fortunately for me, right before I became director, our department released the results of a year's study it had commissioned to assess Missouri's economic climate and compare our economic tools to attract new business with that of other states. Those findings provided us good and bad news. The good news is that Missouri always gets an initial close look from businesses because of our central geographic location, our favorable tax climate, and our highly skilled and productive workforce. The bad news is that the economic tools we have available to attract these businesses often cannot compete with other states.

Here in Missouri we have 53 different economic incentives, the majority of which are intended to attract business. Ensuring that our
economic incentive tools truly work in today's business climate is an evolution that has passed Missouri by. Many of them are obsolete, outdated, or simply approach business attraction in a way that dooms us to fail. On the other hand, we should not fall into the trap of chasing every big deal and we cannot compete if getting that business hinges on a high stakes bidding war of which state can pour the most money into the company's coffers. Our priority must be to go after high-wage jobs and offer incentives that are tied to job creation and performance-not just throwing dollars at the project.

That is why I am so excited about the approach that Gov. Matt Blunt and I have presented to state legislators and that may be law by the time you read this. Called the Missouri Quality Jobs Act, this initiative targets the three economic areas we and many others believe will be most important to our state's future-small and expanding businesses, advanced technology companies, and high impact projects. The difference between the Quality Jobs Act and other incentives is that the employer must produce jobs to receive state benefits and the more jobs, the greater the benefit.

Qualifying businesses are required to create a minimum number of new jobs at competitive wage levels, offer health insurance to these new employees and pay at least half of the health insurance premiums for these individuals. For example, small and expanding businesses must produce more than 20 new jobs in a rural area and 40 new jobs in a non-rural area within two years. In return, qualifying employers will keep a percentage of the state withholding taxes normally paid to the state for these new employees for a set number of years. The amount of the benefit would be based on the wage paid relative to the county average wage where the employer is located. Eligible technology companies and high impact projects would also qualify for Quality Jobs benefits. Through this approach, we ensure hard earned taxpayer dollars only go to business owners that deliver on their promises.

Under Quality Jobs, a company that considers leaving our state and has employed at least 1,000 full-time, year-round people at competitive wages and provided their health insurance for the past two years can qualify for a tax credit to remain in Missouri as well. This gives us an additional new tool to keep good jobs in Missouri. Other provisions in Quality Jobs increase the cap on the state TIF program (tax increment financing). TIF has been so popular and effective that we had reached the cap for the program, so we wanted to give it more room to help our economy grow. The legislation also offers a local option, allowing local voters to determine whether a local sales tax for economic development will be beneficial for their area. While we are in no way encouraging a new state sales tax, we believe communities that need jobs should have the ability to exercise this option if they wish.

I hope the speed with which we are moving forward with great new ideas such as the Missouri Quality Jobs Act demonstrates to you how committed our new administration is to creating and retaining high-quality, high-paying, family supporting jobs. However, never let us convince ourselves that such economic tools are the end-all, be-all to our challenges. These tools only ensure Missouri is not overlooked. Our greatest asset lies in Missouri's natural incentives, particularly our educated, skilled work force that exudes a work ethic second to none.