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Opinion: Entrepreneurs need legislative champions

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After a 2011 marred by partisan finger-pointing and results produced only at gunpoint, expectations are abysmally low for the upcoming legislative sessions in Jefferson City and Washington, D.C.

The challenges are formidable. The national debt is too high and must be curtailed. Entitlements must be managed more effectively without severing lifelines for seniors and the unemployed. Taxes must strike a balance between raising adequate revenues to maintain a civilized society and moderate enough to incentivize free markets.

At the same time, small businesses have fought the good fight during the past three years, and the entrepreneurs who remain are grateful for surviving the Great Recession. But they are weary and leery about what lies ahead in the “new normal.”

Business owners need champions, not candidates. They benefit more from the work of statesmen than stalwarts. Creativity is more important than attack ads in crafting workable compromises for the greater good.

With that in mind, here are a few areas where elected state officials could help center city businesses.

Economic development incentives
Tour any of the city’s three historic business districts and the benefits of the federal and state historic tax credits are plentiful. They have stimulated employment and leveraged millions of dollars in private investment. Their effectiveness should not be reduced by subjecting them to the annual state appropriations process.

Missouri must remain competitive when negotiating for jobs and investment. Legislators should pass a bill that would allow key incentives to be front-loaded in major economic development projects.

Education
Citing the Springfield Area Chamber of Commerce’s 2012 State Legislative Agenda, “Continued investment in all levels of public education will ensure that a properly trained work force will be available to meet the needs of Missouri employers. Additionally, as poverty levels continue to rise throughout the state, it is critical to invest in education to make education affordable and accessible to all to break the cycle of poverty for many Missouri families.”

Gov. Nixon’s proposed budget for elementary and secondary education increases the foundation formula by $5 million but is almost $300 million under the statutorily required funding level. (Editor’s Note: On Feb. 7, the governor submitted an amendment to restore $40 million in funding for public colleges and universities. The funding is from money Missouri is set to receive from a settlement between states’ attorneys general and the nation’s five largest mortgage banks over flawed and fraudulent foreclosure practices that led to the housing crisis.) Community colleges would be cut by $18 million and four-year institutions by $99 million. We are sacrificing the productivity of Missouri’s future work force by cannibalizing our educational systems. And don’t even get Hal Higdon at Ozarks Technical Community College or Clif Smart at Missouri State University started on the funding gaps of students in southwest Missouri.

How to fund the shortfall?
So if economic development incentives are retooled and education funding is merely maintained (rather than slashed), how should the $500 million to $800 million budget shortfall be filled? Administrators should dutifully look for efficiencies in processes and new technologies. But after three years of serious cuts, they are already close to the bone.

Some courageous leaders will need to break from the pack and consider revenue enhancements. One possibility is to eliminate the tax-free status for Internet sales. The Missouri Budget Project estimates this would generate $210 million, based on a University of Tennessee estimate. Just as important, it would allow our Missouri storefront businesses to compete on a more even playing field.

A second option is to increase the state tobacco tax from the lowest rate in the nation at 17 cents per pack. The national average tax is $1.43 per pack, and the states bordering Missouri average $1.07 per pack. If the tax increased to the border average, it would generate almost $500 million a year. It’s been a rough year for smokers in Springfield, but our educational systems should not suffer each year at the expense of cheaper Marlboros.

May 2012 be the year when elected officials stop bickering and work together to invest in jobs for their constituents and education for their grandchildren. I’ll vote for that every time.

Rusty Worley, executive director of Urban Districts Alliance, can be reached at rusty@itsalldowntown.com.[[In-content Ad]]

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