Tuesday, May 12, 2005
Contact: Spence Jackson, (573)751-0290
Legislature Sends Quality Jobs Bill To Governor Blunt
JEFFERSON CITY—The Legislature today sent Gov. Matt Blunt the Missouri Quality Jobs Act to create, attract and retain family-supporting jobs through incentives he suggested to spur economic growth and create significant opportunities for new job creation.
"This legislation provides Missouri with a host of new tools to improve our ability to successfully compete for high paying, high quality, family-supporting jobs,’’ Blunt said. "Missouri must be aggressive to create and attract new jobs and the Quality Jobs Act gives state and local economic developers the means to do just that."
The program, which was given final approval by the Senate and was originally proposed by the governor, 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 bill was sponsored by Sen. Matt Bartle, R-Lee’s Summit, and handled in the House by Rep. Ron Richard, R-Joplin.
"This is a new and better approach to economic development," Blunt said. "We are not just thinking about job creation. We want to create jobs that have a good wage and provide health care benefits."
In order to qualify for the first three programs, employers must offer basic health insurance for new employees in new jobs and pay at least 50 percent of health insurance premiums for all parts of the program. The new jobs that are created must be at or above the county average wage.
Employers would retain a portion of withholding taxes paid to employees in newly created jobs. In addition, an employee would continue to receive full credit for all taxes withheld from their pay.
The first three programs, which would be overseen by the Missouri Department of Economic Development, 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.
"With this legislation, not only do our workers and employers benefit but so do Missouri families,’’ Blunt said. "These changes are essential if we are to successfully bring new jobs to the state and providing communities with more powerful economic development tools is part of my commitment to expanding opportunities for all Missourians.’’
The bill also combines the state’s Tax Increment Financing (TIF) cap with the Missouri Downtown Economic Stimulus Act (MODESA) cap at $108 million while the cap for Tax Increment Financing (TIF) will increase from $15 million to $32 million that will allow the Department of Economic Development to continue to use TIFs for redevelopment projects as the current program is nearly at its cap. This change addresses Blunt’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 is a major step forward for Missouri’s economic development efforts and I would like to thank the governor for his leadership and the Legislature for their hard work,’’ said Greg Steinhoff, director of the Missouri Department of Economic Development. "This legislation will make the state more competitive while at the same time promoting job creation throughout the state.’’