It's All About Jobs

In attempting to build on the state's relative success in 2003, Gov. Holden has introduced a statewide job creation plan he calls "Jobs Now," which incorporates, among other measures, the repeal of certain tax credit programs and the enhancement of the state's enterprise zone program.
        The $3-million, 100-job expansion of pontoon boat maker Bentley Industries, in the city of Mexico, just east of Columbia along I-70, was contingent on a literal expansion of an enterprise zone by MDED in December 2003. Not only did the redrawing allow this project, it also allows the city to market two other vacated facilities, as well as 527 acres (213 hectares) of land at three other nearby sites.
        Holden is particularly vocal about the importance of education in the corporate site selection equation, especially in the wake of cuts in education budgets last year overriding his veto. He noted in his January State of the State address that one plant manager in Hannibal had told him that the company's expansion location choices were "based largely upon the quality of an area's community college."

Gov. Holden

        Holden is no less vocal about reforming the state's 54 tax credit programs, perhaps even more so in the wake of some bad publicity involving sham companies applying for credits. According to Holden's plan, "funds saved from the revised programs will underwrite a $150-200-million bond issuance secured by an annual appropriation of $12-15 million."
        His plan calls for the elimination of three of the "outdated" programs: the business facilities tax credit, the transportation development tax credit and the research and development tax credit. Jack Cardetti, spokesman for Gov. Holden, explains that these will be phased out over the next few years, contingent on what promises the state has already made.
        Asked if some projects benefiting from these programs might find relief elsewhere, he says, "The whole reason these are being repealed is to allow the state to have a Jobs Now fund. We would issue a $150-million to $200-million bond issuance and use that money to fund critical infrastructure needs." Those needs could include research facilities that might be accepting some of the tax credits on the chopping block, but which might also be eligible to receive help from the Jobs Now fund.
        Additional planks of the gubernatorial plan include the establishment of Life Sciences Research Districts, a program whereby incremental state and local tax revenues from designated life science companies could be earmarked as a source of funding for public-sector investment in life sciences research programs at universities.
        But Holden is not about to let go of the state's hard-earned automotive industry heritage. In mid-January 2004, he established the Missouri Automotive Partnership in order to build on the recent retention successes and create even more activity in the industry, which employs some 11 percent of the state's manufacturing employees.

Longtime Public Office Holder
Simmons Takes Top ED Post

Gov. Holden has also introduced a new director of the state's Department of Economic Development, Kelvin Simmons, who is making the leap from regulator to facilitator. Appointed to the Missouri Public Service Commission in June 2000, he served as the commission's chairman from July 2001 to Nov. 2003. He was previously a Kansas City city councilman, and before this appointment was a long-rumored potential candidate for the state treasurer post. But now he's hitting the ground running in a job that calls for exactly that pace.

Kelvin Simmons Director, Mo. Dept. of Economic Development

        "Within days of my announcement, I went over to the St. Louis side and met with RCGA [St. Louis Regional Chamber and Growth Association], where I had the opportunity to speak before their board of directors," says Simmons. "Then I met with the mayor of St. Louis, the county executive of St. Louis County, leaders from St. Charles County and labor leaders. Now that the legislative session has begun, I'm stopped every two steps in the state capitol. And I'm set to go to Kansas City and talk with the mayor and the chamber, as well as Jefferson City and a number of small chambers."
        In his work as PSC chair and in other roles, "constituency" has been one of Simmons' prime focal points. So he has been in a prime position to hear how those citizens want to see their economies grow. Asked what kind of input he had in Gov. Holden's Jobs Now program, Simmons says "one of the first things I talked about was how we might look at infrastructure as a mechanism to create jobs." The state estimates that communities large and small have in excess of $3 billion to $4 billion worth of such projects that need to get under way, and part of the Jobs Now program will leverage federal funding to do just that.
        "One, you get to put people to work right away, and two, because of the infrastructure, it expands the economic opportunities of a community," says Simmons.
        One key component of the state's business climate is a relatively low cost of electricity, something Simmons is intimately familiar with from his previous PSC role. The state's cost for electricity per kilowatt-hour across all sectors in 2002 was 5.5 cents, ranking the state 10th lowest in the nation for electricity prices for residential, commercial and industrial customers combined. (The industrial rate was 4.0 cents per kw-hour, ranking the state 14th in the nation.) Part of the reason for its affordability and reliability is the state's central location, with transmission interconnections in all directions. Gov. Holden has said he credits Simmons for his role at the PSC in keeping the energy costs low.
        "That is a very fine line you have to walk," says Simmons. "As a regulator, by statute, you have to make sure you have affordable rates for consumers and make sure utility companies have a fair rate of return on their investment. Location contributes to some of that." In addition, Simmons was known for leading in a fair, just and reasonable manner.
        "We struck that fine balance and we struck it well," he says.
        Can he continue to strike that balance in matters of cross-border collaboration? Or in the many-faceted operations of his 30-part department, which includes such far-flung activities as the arts council, utility regulation, tourism and welfare-to-work programs?
        "My predecessor looked at ways to streamline and we're doing just that," says Simmons. "We're also going to regional teams. It will also be on my desk to do more with less, because this department has had significant budget cuts in the past two years or so."
        As for the border zones, Simmons says he has an interesting perspective, given his K.C. pedigree.
        "There's a lot of competition that goes on across state lines, and that is an issue we'll continue to deal with, because you have a very wealthy Johnson County [Kan.] there near Kansas City. But you have to have the kind of leadership that says 'This is a regional approach, rather than a competitive situation.'"
        Exhibit "A" for such an approach, he says, was the unique bi-state 1/8-cent sales tax issue that passed in 1996 to help redevelop the city's fabled Jarvis Hunt-designed Union Station. Simmons says that kind of partnership will come into play again on future economic development projects.