ENTERPRISE ZONE A GOOD DEAL FOR CAPE

Cape Girardeau's enterprise zone has generated new businesses, expansions of existing businesses and additional jobs in Cape Girardeau. Since 1986, this tax-credit program has been good business for the city.

In the world of economic development, success is measured in jobs and investment. It is estimated that Cape Girardeau's highly successfully enterprise zone has generated an impressive $191 million in investment and nearly 2,400 new jobs.

One reason for the sizable participation has been the large geographic area of the zone itself. Since its establishment in December 1986, the zone has been twice expanded. Today it covers a 24-square-mile area that takes in downtown Cape Girardeau, Nash Road, Cape Girardeau Regional Airport, Cape West Business Park and the Town Plaza area. That's quite a stretch.

As a way to encourage new jobs and expansion, the state offers tax credits, and local government provides property-tax abatements.

But local governments must walk a fine line in tax-abatement offers. Tax credits must be lucrative enough to encourage new business. But if they're too significant, schools and other entities will suffer from the loss of income. In Cape Girardeau, the businesses receive a 50 percent tax abatement for 10 years.

Ideally the growth of new business will add to the tax base enough to offset any loss to the schools. The investment must pay off. Fortunately, that's just the scenario that has evolved in Cape Girardeau.

The state tax credits and local property tax abatements have sparked 40 new businesses and allowed 82 existing firms to expand. That's impressive.

Cape Girardeau's enterprise zone is set to expire Dec. 4, 2001. The city would be wise to seek an extension of this extraordinary economic development tool. Then the city could continue its use until 2008.

The world of economic development is highly competitive. The offers to businesses looking to relocate become more lucrative each year. Enterprise zones are necessary for Cape Girardeau to compete.