A mixed bag for Missouri businesses

Gov. Bob Holden's proposed state budget for the fiscal year that begins July 1 has some carrots for businesses, but his plan shows little spark for an economic turnabout across Missouri.

The budget plan proposes a reduction in the corporate income tax rate and a three-day sales-tax holiday in August for back-to-school purchases. Both ideas are worth considering, but they will cost $33 million in general revenue -- at a time when Missouri is scrounging for new sources of revenue to balance the budget.

One way Holden proposes to generate more revenue is to close tax loopholes that he says affect mostly out-of-state businesses that operate in Missouri. He estimates closing the loopholes would add $186 million to state coffers. Perhaps. But any plan that burdens businesses operating in the state risks driving those employers away.

For years, both houses of the Missouri Legislature and the governor's office have been dominated by Democrats who frequently turned to union bosses for advice on decisions involving business and industry. When the national and state economies were robust, businesses expanded and added jobs without a lot of special incentives from the Show Me State.

With Republicans now in charge of both the House and Senate, there is some hope that the state's budget policymakers will seek the long overdue advice and support of major employers and the various statewide business groups who have consistently offered workable plans only to be ignored.

Being cozy with labor unions has been good business for politicians seeking campaign financing, particularly in population-heavy St. Louis and Kansas City. But pro-business groups representing employers who struggle every day to turn a profit and bolster the economy are much more knowledgeable about what will create more jobs in this state.

This is an opportunity for the GOP-led House and Senate to move Missouri out of the doldrums of lingering recessionary trends. In the few months that are left in the current legislative session, there is much to be done. The state budget appears to be dominating Jefferson City right now -- and business interests will be taken into account on that score too. But the biggest need for the state is to find the right fuel for an economic turnaround.