This
week the Missouri House perfected and printed several pieces of legislation
relating to economic development. The
Republican-led legislature continues to look at measures that will facilitate
the growth of our economy and encourage the creation of more jobs for our
fellow Missourians.
Supporting
Missouri’s Export Industry
Did you know that Missouri exports over
$14 billion worth of goods each year according to the most recent
estimates? Our state, regional, and
local economies literally depend on the ability of Missouri businesses to find
foreign markets to sell items grown and produced on Missouri farms or in
Missouri manufacturing centers. When our
local businesses thrive, they employ our neighbors, they invest in their family’s
future, and they help fund critical local public services – roads, schools,
public health initiatives, firemen, police officers, and the like.
It’s no secret that the best way to
help someone is to make sure they have a job – and our exporters are doing
great work to ensure the jobs are there.
Sometimes, though, our state gets a little in the way with burdensome
taxes that inhibit the full potential of our private sector. Your Republican-led legislature has taken
notice and is taking steps to help get out of the way and encourage the private
sector to do what it does best – provide a strong quality of life for
Missourians.
There are a variety of proposals before
the House that are aimed at helping our freight forwarders, those who get our
products from Missouri soil to their final destination worldwide, realize their
full potential. We’re taking steps now
to make sure we make the smartest and most economical decisions that will
remove barriers to exporting, support Missouri farm and manufacturing
industries, and encourage prosperity.
House
Moves to Incentivize Data Storage Industry
In the age of computers and mass
storage of information, a new industry has emerged that has a strong presence
across the United States, employs thousands, and is proving incredibly
beneficial to local, state, and national economies. That industry is the Data Storage Industry
and as the name implies they house servers which store massive amounts of
information for businesses, not-for-profits, and government entities. They are basically incredibly high-tech
warehouses.
What’s the House of Representatives’
Proposal?
The Republican-led legislature moved to
allow a state and local sales and use tax exemption for qualifying investments
from the private sector. There’s a
catch, though, designed to safeguard the public’s dollars: not a single
exemption will be allowed until the private investment is made and the
exemption is limited to the net fiscal benefit of the state over the next 10
year period. It’s a great way to get
companies to come to Missouri while guaranteeing the investment.
Why Would We Want Them?
The industry currently is one that is
valued at $30 billion in the US, $100 billion worldwide, and it’s growing at a
remarkably fast pace – 8% annually. That
means if we can get their business in Missouri, they’ll not only add jobs up
front but will continue to do so in the long-term.
Who Else Would Benefit?
The investment in the facilities
required would alone be a boon to the local economy, so cities and counties
would stand to see increased economic activity.
The construction costs are $1,300 per square foot, so the construction
companies and their employees stand to gain tremendously. Keep in mind that your average warehouse
construction costs are only $50 per square foot, so the difference is stark and
significant. Beyond the initial
construction jobs, the industry employs tech-savvy employees and the average
salary is $75,000 per year. If Missouri
had only a 5% share of the industry, that would mean $56 million in annual
payroll and the benefits like health insurance that come with it.
Is Missouri Even A Viable Candidate?
Yes.
Our low cost and abundant energy – a major consideration for the
industry – makes us an attractive state to set up shop. On top of that, we have the availability of
fiber communications and strong IT talent in our workforce. We must act quickly though, as our
neighboring states are already incentivizing the industry. Iowa, Nebraska, and Oklahoma have already
landed major investments from companies like Microsoft, Yahoo, and Google.
Missouri’s Angel Investors Play a Big
Role in Economy
Each year the private sector takes huge
risks on emerging business ideas. The
successful ones have huge payoffs for everyone.
They create new jobs, economies grow, and local and state governments
benefit from increased revenues and fewer of their citizens relying on social
safety net systems. But “Angel
Investors”, folks who invest their hard earned money in new business ideas,
sometimes pick a losing product or market.
Missouri’s Republican-led legislature knows that the private sector is
better-suited to handle many of the problems a society might face. However, if the risk is too great the private
sector reacts by holding back its potential.
We’ve taken notice and we think we have a strong proposal to encourage
angel investors to take risks and support continued job creation, investment,
and growth.
Representative Noel Torpey (R-Lee’s
Summit) has filed HB 191 which affords a small tax credit to qualified angel
investments. The seed capital that the
investors provide then flows to the new business to take their product or
service idea to the market so it can be successfully sold. It’s a small tax credit that will have a
large impact. When businesses are
successful, they increase payrolls, they provide health coverage and other
insurances, and they and their employees pay taxes. On top of that, they provide an avenue for
increased consumer spending which catalyzes even more growth. In the long run the small investment that the
State commits will have exponential growth potential.