Clay County Group Continues Work on Business, Job Loss
Clay County EDC, led by Jim Hampton, continues its efforts to ensure this area and the entire state remain competitive with other regions for job and business development.
The Clay County Competitiveness Task Force met Dec. 11 to discuss ways to positively reward companies that help create jobs in Missouri. Increasingly, Missouri is surrounded by areas willing to pursue extreme efforts to attract businesses, cutting revenues to levels many consider unsustainable.
Task Force Chairman Pete Hall said the issue is straightforward. “We, the people in this area, have a great concern over the loss of businesses, jobs and development,” he said, noting the elimination of key taxes in Kansas. “If we don’t react, we’re going to lose business, period.”
Ray McCarty, Clay County EDC board member and president of Associated Industries of Missouri (AIM), has also been working with the Clay County Task Force. He said AIM is looking for ways to address this problem by rewarding companies that are here now, producing jobs and growing the economy and quality of life. “That’s a good way to approach the issue but it’s hard to do,” he said. “You want to reward companies that have been solid cornerstones of our communities.”
Hall said proposals must balance interests statewide, in order to garner the necessary, broad support. “This area will see the biggest effect,” he said. “But solutions must also be attractive to the people of Booneville, St Louis and Springfield in order to succeed. We have to design things that everyone will benefit from.”
One strategy is a progressive tax reduction for businesses statewide. The reduction would begin with a 10 percent cut next year then, if total state income tax revenues continue to grow, an additional 10 percent would be cut the following year, and so forth until the income tax on every Missouri business has been cut in half. He noted that this differs dramatically from states like Kansas, which have made extreme cuts without any assurance that the cuts will result in economic growth.
An additional component may include an accelerated tax benefit for companies with above-average payrolls. If a company pays at least 150 percent of county average wage, the company may be entitled to cut their tax bill in half beginning in 2013.
“If companies take that savings and turn it back into payroll everyone benefits,” McCarty said. “We believe this more measured approach avoids the problems of the Kansas approach, which already caused a major budget shortfall.”
Hall agreed. “There are several things about this I really like,” he said. “If a business doesn’t increase jobs then the reductions don’t go forward. The more you do, the more you save. And it’s not just for new businesses—it affects businesses that are already part of the community. It also recognizes differences in pay between different parts of the state.”
The Missouri effort also includes tax benefits for ALL Missouri businesses, including S Corporations, which involves many smaller businesses that are generating a majority of the new jobs in Missouri and nationally.
McCarty said current estimates project the 10 percent reduction will cost Missouri $73 million. However, without effective efforts to keep companies here, Missouri could lose $100 to $200 million in revenues because of business out migration, much of that in metropolitan Kansas City areas such as Clay County.
“This is something Missouri needs to take seriously,” he said. “It’s a real threat, but presents us an opportunity to make Missouri more attractive for new and existing employers.”
Area State Representative T.J. Berry is among the Missouri leaders indicating they will sponsor bills to on this issue in the next session