"[Missouri's]corporate welfare tally reached an all time high of $629 million. That’s an increase of more than 20 percent since the $523 million in tax credits Missouri offered business and industry in 2010, when the commission first met." Excerpt from Mo. Watchdog article posted August 30th, 2012.
The examination of these credits value to the state is something many legislators recognize as necessary. The thing that is entirely left out of the debate over these is that the program is exclusive by design and eliminates our true small businesses.
The root of that problem is that the true small businesses have no lobby. Even the so-called "small business" organizations are generally funded and work on behalf of small businesses that most people would call large corporations. The problem there is in the language. Small business being inclusive with 200 employee firms is silly and misleading language. 85% of the businesses in the nation have 20 or fewer employees to begin with. The idea that they would have to create a minimum of 20 jobs to qualify eliminates them entirely. This takes the largest part of our Missouri businesses out of play.
The examination of these credits value to the state is something many legislators recognize as necessary. The thing that is entirely left out of the debate over these is that the program is exclusive by design and eliminates our true small businesses.
The root of that problem is that the true small businesses have no lobby. Even the so-called "small business" organizations are generally funded and work on behalf of small businesses that most people would call large corporations. The problem there is in the language. Small business being inclusive with 200 employee firms is silly and misleading language. 85% of the businesses in the nation have 20 or fewer employees to begin with. The idea that they would have to create a minimum of 20 jobs to qualify eliminates them entirely. This takes the largest part of our Missouri businesses out of play.
"The much broader Quality Jobs Program lets small and expanding businesses keep 100 percent of withholdings up to five years as long as they create 20 new jobs in rural areas and 40 in urban areas. Technology firms retain withholdings up to 6 percent of new jobs payroll for five years, with some firms retaining 7 percent of new jobs payroll. Technology firms must employ 10 workers to qualify, while so-called “high-impact” firms — companies with high current employment and projected employment growth — must have 100 workers." Excerpt from Mo. Watchdog article. Click to read.
Some of these incentives have worked. IE- The LMV plant in Liberty supplying Ford. But others are worthless except to special interests and corporate donors to campaigns. Instead of getting us the most bang for our bucks, legislators are getting themselves the most bucks for their campaigns.
So far, simply not dealing with this has been the means of perpetuating the wrong priorities. The solution to this starts with an ongoing assessment of their value, and changes to make it inclusive of our largest group of Missouri businesses...the mom and pop shops, small partnerships, start ups and individually owned but small number of employee franchises.
We can do this and it starts with an honest, coherent examination of the resources available and their return. The next step is to make it inclusive of the true small businesses because not to do so is missing a huge opportunity for job creation. After eliminating non-productive incentives, we need to collect the revenue and return it to vital programs like K-12 education that have been slashed because of misplaced priorities.
-Kevin Morgan
