'Jobs Now' might boost economy later

JEFFERSON CITY, Mo. -- Gov. Bob Holden calls it the "Jobs Now" plan. But in reality, the economic development bill praised by the governor and overwhelmingly passed by lawmakers could more aptly be called the "Jobs Later" plan.

That's because the legislation awaiting Holden's signature is more likely to result in jobs in future years than immediately after it is enacted, as the word "now" might imply.

At the heart of the Jobs Now plan, as outlined last December by Holden, was a bond issue of up to $200 million that would provide an infusion of cash for local public works projects, such as sewers and streets needed to accommodate businesses.

As passed by lawmakers in May, the plan no longer includes bonds. Instead of a large and immediate outpouring of cash, the program would provide up to $12 million annually for local infrastructure projects.

'Toward the back end'

Yet Holden is still calling it the "Jobs Now" plan -- even as business and economic development officials who supported it are acknowledging it won't create many jobs quickly.

"Probably the impact is not going to be immediate; it will be more toward the back end," said Mitch Robinson, executive director of Cape Girardeau Area Industrial Recruitment Association. Until two weeks ago, Robinson also was president of the Missouri Economic Development Council, a state association of local officials who helped develop and lobby for the legislation.

The economic development bill passed the House and Senate without any dissent. Like Holden, Republican legislative leaders promoted the bill as a success, although they did not use Holden's "Jobs Now" label.

Rather than highlighting the public works grants, local economic development officials are most excited about another part of the bill that expands the ability of communities to offer incentives to businesses that locate in "enterprise zones."

"The heart of the bill is the increase in the number of enterprise zones," and the ability of businesses that locate there to sell or get refunds on state income tax credits, said Tom Riederer, president of the Independence Council for Economic Development.

Missouri currently has 69 active enterprise zones -- areas that because of high unemployment and low personal income levels qualify to offer industries breaks on local property taxes and state income taxes.

But the law's 22-year life for 14 of those zones -- including ones in St. Louis, Springfield, Sedalia and several rural areas -- is due to expire in two years. Many more areas are to lose their designations in subsequent years. That makes it harder for local economic development officials to recruit businesses, because there is no long-term guarantee of tax breaks.

New enterprise zone

The legislation creates a new category of "enhanced enterprise zones" -- available to the entire state, with easier-to-meet criteria and a 25-year duration.

Economic development officials say the revised program should help Missouri communities better compete against other states. But the payoff is not immediate, because communities first must apply for the designation, then promote it to businesses, which could take several years to complete a job expansion or facility construction.

Besides the new enterprise zone criteria, the business community also praises the bill's expanded tax breaks for businesses that strike job-training partnerships with community colleges. Whereas the tax breaks now apply only for new employees, the legislation allows them for existing employees retrained to keep pace with changing technology.

"It's kind of a 'hanging onto our jobs now,"' said Ray McCarty, fiscal affairs director for the Missouri Chamber of Commerce and Industry, which also supports the bill. "I don't think there's anything in there that creates jobs now."

Holden spokeswoman Mary Still said the governor plans to sign the bill in July. And despite its somewhat delayed approach, Holden is still promoting it as the "Jobs Now" plan.

"Obviously, he proposed more money for a bigger shot in the arm for local economies," Still said. "This will provide a steady approach over a longer period of time, but just not as much initially, and he's fine with that."