Missouri: Real Opportunity for Business
Missouri was recently given an "A" grade and a top ranking in the nation for manufacturing and logistics.
Oct/Nov 08
Missourians have been known for their lack of gullibility - their insistence on candor. To tame this frontier, those who came here couldn't afford to be duped. Theirs was the "show-me" spirit that helped them prosper in the Missouri territory.
Today that spirit is translated into a no-nonsense work ethic and a state that's serious about setting the table for new investment. In fact, Missouri was recently given an "A" grade and a top ranking in the nation for manufacturing and logistics in an independent study by Ball State University's Bureau of Business Research. Based in Muncie, Indiana, Ball State's National Manufacturing and Logistics Report Card ranked all fifty states on nineteen factors that are important to manufacturers and the transportation and logistics industries. The categories include property taxes, sales taxes, unemployment insurance rates, corporate taxes, crime rates and the percentage of the population with college degrees.
Michael Hicks, an associate economics professor at Ball State and the director of the Bureau said the common thread among the top states is government leadership that takes a comprehensive approach toward developing policies to attract and retain industries. "It really comes down to basic good governance at the state and local levels."
Historically, Missouri has been one of the country's low tax states. Missouri ranks 42nd (or 8th lowest) in per capita state and local tax collections for 2008 according to the Tax Foundation. For corporate tax rates, Missouri is in the lowest 30% among all states. And, because of low fuel taxes, Missouri's average price for gasoline and diesel is typically ten to twenty cents per gallon below the national average according to the Triple-A's Daily Fuel Gauge Report. These factors and others combine to give Missouri the fifth lowest cost of living in the United States (Missouri Economic Research and Information Center).
Despite these intrinsic advantages, in recent years Missouri has taken additional steps (the "good governance" to which professor Hicks alludes) to improve its attractiveness for new business development. Among them:
• Workers' compensation reform Because of reforms enacted in 2005, Missouri employers will see a nearly eight percent reduction in their workers' compensation rates in 2009. In September of 2008, the National Council on Compensation Insurance recommended a 7.7 percent reduction in Missouri's rates, ranking the state first among 11 Midwestern states for the largest reduction in workers' comp rates. In 2005, Governor Matt Blunt signed legislation stipulating that employers are only liable for injuries for which they are directly responsible. The reform bill also limits benefits significantly if employees are found to be under the influence of drugs or alcohol at the time of the accident. It raises penalties for fraud and institutes performance audits for administrative law judges to promote neutrality in workers' compensation awards.
• Litigation reform In 2005, Missouri adopted tort reform that, among other things, limits the venue in which cases can be heard to the location in which the injury occurred and limits punitive damages to $500,000 or less.
• Enhanced Enterprise Zones Implemented in 2004, the EEZ program allows new companies creating as few as two jobs with $100,000 investment to receive tax credits against their corporate income tax that are both refundable and salable, effectively giving companies real dollars they can use for equipment, land or building investments.
• Missouri Quality Jobs This popular program allows either new or existing employers to retain a portion of the state taxes withheld from new or retained employees' paychecks if the employer pays at or above the average county wage and provides health insurance. The Quality Jobs program is a performance-based incentive that encourages the creation and retention of sustainable jobs in Missouri communities.
• Fiscal responsibility Through spending restraint and the creation of over 72,000 jobs in the last four years, Missouri will enter 2009 with a healthy budget surplus, giving the state government more stability, even in tough economic times nationally, and allowing Missouri to be even more proactive in economic development.
Missouri is in the middle of the country. That location gives Missouri companies an advantage in shipping costs and the ability to reach North American markets. It's no surprise that both St. Louis and Kansas City host large multi-modal hubs. With 10 interstates serving Missouri, 15 river ports, 131 airports and five Class I railroads, you can get there from here - economically. And, because of its geology, Missouri sports more underground industrial and storage space than any other state. At least 20 million square feet are available in former limestone mines offering secure, temperature-controlled space housing data, paper records and even tons of American cheese. Once the limestone's been removed and a floor poured, these cavities become some of the most stable and affordable industrial spaces in the country.