A great deal of ink has been spent in newspaper opinion pages around the state discussing the virtues and vices of Missouri investing state funds in economic development. The prose follows the same line that has stalled economic development debate in the Missouri legislature during the last two years. Unfortunately, competing editorials and unresolved debate do not create jobs.
With Gov. Jay Nixon’s call for a special session and Senate and House leaders’ commitment to compromise, that stalemate may finally be broken. That’s good news for Missouri.
Whether philosophically you believe in providing state-funded economic development incentives or not, you cannot ignore that we are competing in a global economy – an economy in which states around us effectively use tax incentives to lure businesses away from Missouri. Unless tax incentives are addressed at a national level, Missouri will not be able to escape that reality. Missouri cannot compete for jobs as an island.
We are spending time debating the wrong issue. The question is not whether Missouri should invest funds in economic development initiatives. The real question that we should be asking: How can Missouri best invest these funds?
Targeting funds to establish an air cargo hub between St. Louis and international markets is one proposal that would generate dividends for the region and our state. This plan would allow St. Louis to leverage one of its greatest assets – its location in the center of the nation. Because of its geographic centrality, St. Louis is a hub for air, truck, rail and water transport, with a major intermodal presence for each. St. Louis remains the second-largest inland port by tonnage and the third-largest rail commerce center in the country. Eighty percent of U.S. truck and 50 percent of U.S. rail traffic still passes within a 50-mile radius of St. Louis. Few airport cities can match the location and transportation network advantages St. Louis offers.
Unlike high-trafficked cargo airports in Chicago, Dallas, Miami or Los Angeles, where carrier networks already are established, the St. Louis airport provides independent international carriers flexibility to establish operations. However, St. Louis is not the only airport that can provide this benefit, which is why the tax incentives are a critical part of the puzzle.
At a time when our state is struggling to balance its budget, it is a wise move to invest money in a proposal that has potential to generate additional tax revenue. This proposal could transform St. Louis, Missouri and the entire Midwest. It would open up a new industry and thousands of new jobs for Missourians.
Provisions in the proposal protect state funds. If the cargo hub never comes to be, then the state is not required to do anything. The tax incentives are tied to international air freight activity, and the hub must be operational before Missouri offers any incentive. One thing is certain, however. If Missouri doesn’t move on this opportunity soon, the international hub will fail, and no jobs will be created.
The cargo hub opportunity is not the only economic development issue on the table. Providing funding to encourage the growth of the data center industry is another priority included in the call for special session. With enhancements to its tax structure, Missouri could make itself the most attractive environment in the nation to locate data centers and secure our piece of the estimated $12 billion in U.S. data center industry investment expected within the next three years.
The Missouri Science and Innovation Reinvestment Act is also a wise economic development investment. As our economy becomes more reliant on technology, this act grants vital funding to keep and expand innovative, high-tech entrepreneurial companies in Missouri.
For years now, Missouri’s stalemate over economic development has stymied progress. True, sustaining hours of debate, blocking legislation and writing opinion editorials take a great deal of effort and time. But finally resolving this issue and finding a real, working compromise takes even more effort. We urge lawmakers to show true leadership and finally put the unproductive tax credit debate behind them, and allow opportunities like these to create jobs for Missouri.Daniel P. Mehan is president and CEO of Jefferson City-based Missouri Chamber of Commerce and Industry, which represents nearly 3,000 employers that employ 425,000 Missourians. He can be reached at firstname.lastname@example.org.