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The legislative session that could have been

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A dark cloud hung over most job retention and creation debate held during the 2010 legislative session. It wasn’t a cloud of sagging budgets, term limits or election-year politics – although those things certainly played a part in slowing down the passage of many pieces of legislation. The darkest cloud over the lawmaking process that doomed the passage of this session’s critical economic development legislation was lack of consensus.

The consequences of the inaction on jobs creation policy undoubtedly will be felt across the state, especially for Missouri employers. Inability to find agreement on how to return solvency to Missouri’s Second Injury Fund means that Missouri employers and workers will remain uncertain how claims will be covered. The stalemate on legislation to address Missouri’s Unemployment Insurance Trust Fund means the system could be nearly $2 billion in the red by 2014. And most notably, the inability to gain consensus on valuable economic development tools that Missouri employers could have used to create jobs was unresolved at the session’s end.

While some important policy changes for business did complete the legislative process, many other job creation priorities were caught up in disagreement, and eventually failed as a result.

Economic development was crippled by tax credit reform debate, which seemed to be at the center of every discussion. But even before late-session press conferences put the issue on center stage, tax credit reform had been a looming, unresolved issue that stymied economic development opportunities for the last two years. Among the economic development casualties this legislative session:

• Data center incentives. Legislation targeting the fast-growing data center industry was a missed opportunity that jeopardized billions of dollars in investment around Missouri. Legislators pushed for provisions to help Missouri gain its share of the roughly $10 billion investment projected nationally in the next three years for the data center industry. More than 80 percent of large corporation data center users plan to expand within 24 months, according to a recent study. Missouri has many natural and infrastructure assets to offer, including low utility costs, abundant power capacity, a strong fiber network and a trained workforce. The missing component was tax incentives, which are already in place in neighboring states. For a 100,000-square-foot data center, site selectors are handicapped by about $15 million to do business in Missouri. Instead, companies may take their business to Nebraska, Iowa, Kansas or Oklahoma, where tax exemptions are already in place in addition to personal property tax exemptions and abatements. The legislation was in House and Senate bills, in addition to being amended to numerous economic development bills.

• Manufacturing Jobs Act. Another missed opportunity was the Manufacturing Jobs Act, designed to incent existing large manufacturers, such as automakers, to expand product lines in the state by tying tax benefits to significant investments, and job retention and creation. It was part of Senate debate in the final hours of the session, but was not brought up for a vote.

• MOSIRA. Missouri also lost out on a tool to help grow high-paying, science-based jobs through the Missouri Science Innovation and Reinvestment Act, or MOSIRA. The act would have created a funding mechanism to reinvest a portion of the tax revenues generated by tech companies into infrastructure, training and promotion that would encourage new job creation in this sector. Although an early priority, it lost steam in the second half of the session.

• Show-Me Fund. A powerful economic development tool that surfaced in a late-session proposal by Gov. Jay Nixon would have allowed the Department of Economic Development to front-load economic development incentives. This program could have been Missouri’s answer to closing funds used by other states to compete in bring new business development into the state. It also fell to the wayside amid the tax credit reform debate.

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 dmehan@mochamber.com.[[In-content Ad]]

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