Tuesday, July 5, 2005
Contact: Paul Sloca, 573-751-9065
Governor Signs Missouri Quality Jobs Act to Create Jobs, Spur Economic Growth
JEFFERSON CITY – Keeping his pledge to create an economic environment that provides Missourians greater opportunities, Gov. Matt Blunt today signed into law the Missouri Quality Jobs Act tying job creation to economic incentives for businesses.
"The Missouri Quality Jobs Act is a pro-jobs, pro-family measure that charts a new course for economic development in which government does not create jobs but rather provides an environment where entrepreneurs create jobs," said Blunt, who proposed the legislation in March. "This is a new approach to economic development. The taxpayer supported incentives associated with this program will help create good jobs with good wages and health care benefits. These are key requirements that have been lacking in the past."
Blunt, who held bill signings in Joplin, Kansas City, St. Joseph, St. Louis and Cape Girardeau, was joined by Greg Steinhoff, director of the Department of Economic Development. The bill was sponsored by Sen. Matt Bartle, R-Lee’s Summit and handled in the House by Rep. Ron Richard, R-Joplin.
The law, which goes into effect Aug. 28, is divided into four separate programs each with separate qualification requirements: The Small Business and Expanding Business Program; the Technology Business Program; the High Impact Projects Program; and the Job Retention Program. The programs would be overseen by the Missouri Department of Economic Development.
In order to qualify for any of the programs under the Missouri Quality Jobs Act, employers must pay workers the average county wage or above and offer basic health insurance including 50 percent of premiums. Employers would retain a portion of withholding taxes paid to employees but an employee would continue to receive full credit for all taxes withheld from their pay.
The first three programs would allow Missouri to use a portion of withholding taxes on wages paid to employees in newly created jobs as an incentive for the creation of jobs.
Under the job retention program, companies must have employed at least 1,000 full-time, year-round employees during the two years prior to their program application. The job retention tax credit will be up to 50 percent of the withholding tax generated by the employees at a company for five years with tax credits capped at $750,000 annually with the total annual program cap of $3 million.
A company also would be required to make a $70 million investment within two years of making an application for the program and local governments must provide local incentives of at least 50 percent of the new local revenues created by the project for 10 years.
"Creating new jobs means that Missouri workers and their families will benefit while our communities will grow stronger," Blunt said. "I am committed to making sure that all Missourians have an opportunity to succeed and the Quality Jobs Act provides us with the necessary tools to do just that."
The bill also increases the state’s Tax Increment Financing (TIF) cap from $15 million to $32 million annually. The change in the TIF cap addresses the governor’s concern over past TIF commitments made by the previous administration that may have exceeded the $15 million annual cap.
The bill would also allow local voters to determine whether a local sales tax for economic development will be beneficial for their area. Currently, only so-called "charter cities" have this authority. The bill also authorizes the Department of Economic Development to charge the recipient of any tax credit a fee in an amount of up to 2.5 percent of the amount of the tax credits issued. Proceeds from the fees will be used to support the programs.
"This legislation means Missouri communities will have an opportunity to make a difference in trying to attract new businesses to the state," Blunt said. "This option is a way for citizens to have a say in the economic future of their communities."
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