Other views: Incentives are useful tool in competitive landscape

The frequent use of incentives by states and local communities began in the 1950's to attract new jobs and investments. In the 1980s, it began on a much larger scale with the use of incentives by the State of Kentucky to attract Toyota Motor Co. car manufacturing plant. Martha Layne Collins, who was then governor, wanted to make a large impact on her state's economy. Now, more than 5,000 people are employed at the Georgetown, Ky., Camry production facility. This facility plus hundreds of suppliers have located in Kentucky to meet the needs of the automotive industry. This can also be said of BMW in South Carolina, Mercedes-Benz in Alabama, Nissan in Tennessee and Mississippi and Toyota in Indiana.

These incentives can range from free land, job training funds, improved infrastructure, tax abatements to cash payments. Are all of these incentives required for every project? No. Do companies sometimes take advantage of programs when their decision has already been made? I'm sure it happens sometimes.

But what I do know for sure is that for a community or state wants to attract new jobs, new business, new investments that local or state governmental unit must be willing to provide an incentive of some sort. In today's competitive environment, incentives are a required tool that has to be available for use.

In the summer of 2004, the Missouri Economic Development Council hired private out-of-state consultants to review our state's economic development program and the various tools we had to recruit industry. The report was entitled "Moving Missouri to the Vanguard: An Analysis of Incentives and Statewide Development Programs in Missouri." The report was used to educate Missouri legislators, economic developers and local leaders on the lack of productive tools for Missouri to attract and keep good paying jobs for our residents. As part of this effort Gov. Matt Blunt signed the Missouri Quality Jobs Program this past spring. Since August, the program has provided incentives to companies to add employment to existing or new companies in Missouri.

Locally, Commander Premier was the first company to be approved for this program. This program will be providing needed capital to the company to grow and prosper at the Cape Girardeau Regional Airport.

Today when companies are looking for new locations for a new facility they base those plans on sound business reasons like availability and skill level of the workforce, closeness to interstate access for shipping, access to raw materials, cost of utilities plus many, many other reasons. One of those other reasons is always incentives. What can the local community or the states do to help offset the high cost of startups or expansions? The community must determine well ahead of any potential visit what programs could be used to assist expanding companies. Does the city or county want to attract new companies? Some communities are not willing to provide incentives. Often times these are the communities that lose their employment base then struggle to have jobs that provide local tax revenues needed by the community.

Here in our area we have local leaders who believe that we must use incentives in a positive, yet prudent manner that provides increased revenues for the local taxing districts yet create high paying positions that can provide good benefits and wages for our workers. Cape Girardeau County has historically done this for our entire region with the local workforce consisting of more than 24 percent of workers from surrounding counties.

Prior to the State of Missouri providing a final incentive offer, an economic model is generated to make sure a positive impact will occur based on new jobs, wages and benefits that will be coming to the state. Here locally we also review what the new company will be paying. Will it be able to find the workers at that pay level? What type of benefits will they provide? Is the company a good corporate citizen for our community? Is it a company that will be able to survive in today's tough business environment? And will the company take care of the environment and the health of its workers? All these questions plus others are reviewed and considered prior to any offer being made by the local community.

With the passage of the Missouri Quality Jobs program the State of Missouri is in a much better situation. We now must work on providing incentives and tools for our existing industries to remain competitive in this global economy. We must work on expanding small business assistance programs like those offered by the Small Business Development Center at Southeast Missouri State University. We also must bring back the higher levels of job training assistance that was cut by the legislature due to budget constraints. These funds help companies train their workers to be more productive in their workplace. We must find ways to better help these companies when they have tough times.

Until all states and countries stop offering incentives we will have to be ready locally and at the state level to have these tools available or our community will become another community facing dire and uncertain times.

~ Mitch Robinson is the executive director of the Cape Girardeau Area MAGNET.