Economically Speaking: Governor places focus on balancing budget, jobs

Joseph L. Driskill is the director of the Missouri Department of Economic Development.

In his annual budget message on Jan. 15 Gov. Bob Holden outlined a bold plan to address Missouri's revenue shortfall while still protecting education and our state's most vulnerable citizens. This includes a shortfall of $400 million in the current fiscal year and a projected shortfall of as much as $1 billion in the next fiscal year.

Missouri's budget situation continues to be bleak. During the last fiscal year, Missouri experienced its first decline in net general revenue collections since 1955, with 3.5 percent less collections than the year before. The latest revenue estimates show this trend will likely continue in fiscal year 2004. Unfortunately, there are no quick fixes or easy answers.

The governor should be commended for his leadership on the budget. It is easy to criticize the governor's decisions and recommendations, but it is much harder to come up with viable solutions as he has in his proposed budget.

The budget is now going through the legislative process and it is becoming more apparent every day that this crisis is real and that the time has come for action, not rhetoric. Further complicating the situation is that while the state's total budget, including federal funds, is just more than $19 billion, the governor and General Assembly directly control only $6.8 billion. That means a $1 billion shortfall is extremely significant.

Holden has outlined his Fair Share Budget plan, which is a step in that direction and an attempt to eliminate tax loopholes that gives unfair advantages to a handful of Missouri corporations.

I was particularly pleased with the governor's comments related to economic development. He was very clear: "As we look to the future, our single most important priority can be summed up in one word jobs."

The governor's jobs plan includes a reduction in the corporate tax rate from 6.25 percent to 5.25 percent, the lowest in the nation, and targeting incentives to protect good jobs that are already in Missouri. The reduction in the corporate tax rate will help provide an economic incentive to Missouri businesses and spur economic activity.

By reviewing our incentive programs we will make sure that they are focused on creating jobs and strengthening our communities to promote economic growth. In the Department of Economic Development we will continue reviewing tax credit programs to make sure they are effective and efficient and that taxpayers are getting a good return on their investment.

Education at all levels is a top priority because it will help ensure that Missouri is a leader in the knowledge-based jobs in the economy of the future. Without a strong education system, our work force will not be prepared for the growing number of technology-based jobs that are being created. And, without a competitive work force our businesses will not be competitive.

Public-private partnerships are more important than ever, particularly in these difficult budget times. Certainly the great research being done at our higher-education institutions must be done in partnership with Missouri businesses to help ensure this research can be turned into jobs and economic growth.

The governor expressed his support for a research alliance between universities, which will also partner with the business community to build better cooperation.

Another priority in this year's budget relates to small-business development and entrepreneurs. We want to provide more coordinated services to small businesses.

There are other things in Holden's budget that will help preserve our quality of life, help make our communities viable and provide opportunities for economic growth. Along with the other departments of Missouri government, we are committed to working with the governor to ensure our resources are used wisely and targeted toward results that will make our state better.