Economic development officials recommend 50 percent abatement for enterprise zone

A special enhanced enterprise zone would provide property tax breaks of at least 50 percent to certain new or expanding business in Cape Girardeau County, although some at a special meeting Thursday would like to see that figure closer to 100 percent.

A group of business and economic development leaders from Cape Girardeau and Jackson met Thursday to discuss forming a recommendation on how much a property tax abatement should be given to such businesses as an economic development tool to entice new industry to the area.

Economic development officials Mitch Robinson and John Mehner were both in favor of using a flat 50 percent tax abatement, which would last for 10 years before expiring. Robinson is executive director of Cape Girardeau Area Magnet and Mehner heads the Cape Girardeau Area Chamber of Commerce.

"You have to think of it as a tool box," Robinson said. "This would be another tool we could use to encourage economic development. The majority of other places use the 50 percent flat abatement. It's enough of an incentive to make a difference, and it shows we have some skin in the game."

Other possibilities, which garnered some measure of support from a couple business executives at the meeting, included a tier-level option of up to 100 percent in abatements for at least five years.

Randy Kluge of Drury Southwest Inc. suggested he would favor at least looking at that option.

"These sorts of enticements make you get out the bulldozer," he said. "Without them, it's hard to get out the bulldozer."

The group is looking to make a recommendation to a special committee that is being formed before an application is submitted to the Missouri Department of Economic Development by year's end. A zone, which would include areas in Cape Girardeau, Jackson and rural parts of the county, would be established within 60 days of the department authorizing it.

The recommendation would be made to a seven-member board made up of people from various school boards, the cities of Cape Girardeau and Jackson and the county. That board would decide what amount the abatements would be. School district officials from both communities have expressed worry that new industries would create jobs in the area, which would bring in more children to their districts. Schools, which draw their funding from property taxes, would lose out on any abated taxes.

Also worried is state Sen. Jason Crowell, who wrote in a column Thursday that tax credits are becoming costly.

Last year alone, he wrote, $521.5 million in tax credits were redeemed and budget experts predict that number to increase to $698.4 million this year.

"I believe we must change our use of tax credits and I am calling for fundamental reform," he said in his column. "All tax credits should be required to be approved like every other state expenditure of your tax dollars; through the appropriations process."

The committee will meet again later this month, before a state public hearing the week of Dec. 13.

smoyers@semissourian.com

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