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FEBRUARY 27,
2008
RCGA Economic Development Priorities
Move Forward In Missouri Legislature.
The
Missouri House Job Creation and Economic Development Committee
passed their economic development bill (HB 2058) which will
provide needed assistance for technology-based
economic development. The bill, sponsored by Rep.
David Pearce (R-Warrensburg) is headed to the House
Calendar this week for debate and vote by the House of
Representatives.
Jay DeLong, RCGA Vice President for New
Ventures and Capital Formation, and Gil Bickel, Chair of the St.
Louis Arch Angels Network, testified in favor of the
bill, including the creation of a $5 million angel tax
credit. DeLong showed the Committee that, while
venture capital managed in Missouri has risen from $393 million
to $926 million from 1998-2006, Missouri's overall share
of venture capital investment has declined, as entrepreneurial
investment has migrated toward surrounding states.
From 1998 to 2006, the portion of U.S. venture capital in the
Midwest has declined from 6% to 4%, but more
troubling is that Missouri's share of the Midwest has
dropped from 19% to 9%. To see the amount of
venture capital investment in Missouri and its
declining share relative to other states, click
here. While Missouri is a national leader in
receiving federal R&D grants (9th) and NIH grants (12th),
the State seriously lags behind in invention disclosures (20th)
and university start-ups (27th). DeLong said the
problem is that Missouri is not keeping pace in new
technology start-ups and not maturing existing ones to the next
level of growth.
The $5 million Angel Tax Credit, proposed
in the bill and supported by Governor Matt Blunt, would
encourage angel investment in qualified small businesses
with high-growth potential. The tax credit would bridge
a gap in equity funding for start-up businesses and encourage
Missouri's venture capitalists to invest locally. 16 states
currently offer an angel tax credit, including Kansas and Iowa.
The angel tax credit is part of
the "Grow Me State" initiative (spearheaded by the RCGA
and Chambers of Commerce throughout the State) to close the gap
in capital formation in Missouri. A recent study
by the Bloch School of Business at UMKC found that Missouri
spends only $0.10 per capita on capital formation activities,
compared to $2.79 in Missouri's neighboring states.
The House economic development bill
also contains RCGA priority legislation to
increase the annual cap on the Quality
Jobs program ($40 million to $60 million),
the Enhanced Enterprise Zone program ($14
million to $24 millon).
In the same week, the Senate
passed their economic development bill (SB 718) with
similar provisions. However, the Senate bill, sponsored
by Sen. Harry Kennedy (D-St. Louis), does
not yet include the angel tax credit.
The RCGA urges the
House and Senate to move quickly on both economic
development bills so that Missouri can continue to remain
competitive in attracting companies and investments to the
State, as well as to begin addressing early-stage capital
formation gaps for stimulating entrepreneurial start-ups.
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| Focus on
Illinois: Governor Blagojevich Budget
Address Proposes Funding for Capital
Bill.
 In last week's State of the State
Address, Governor Rod Blagojevich again endorsed a $25 billion
capital construction plan, entitled
"Illinois Works". His proposal included $14.4
billion for roads and bridges, $3.8 billion for school
construction and $1.1 billion for higher education projects. It
has been nearly ten years since a capital bill has been passed
in Illinois, and St. Louis-area lawmakers are eager to see vital
projects begun. Representative Tom Holbrook (D-Belleville)
told the Belleville News-Democrat, "We have to do a
capital bill this year. It's beginning to show in our roads, our
bridges, or state facilities. We are getting to the critical
points here. We should not leave here this spring without
passing something."
Blagojevich proposed a one-time 20%
corporate income tax cut for businesses maintaining their
current level of employment. The one-time tax cut will save
business $300 million. However, the Governor also proposed a 3%
payroll tax on companies of over 10 employees who
do not pay at least 4% of their payroll on employee health
insurance. The tax would raise $417 million to expand health
care access and insurance to low-income Illinois. In
addition, the budget calls for $140 million in new taxes on
businesses, such as the computer software tax. "That is a bait and switch proposition if
I ever heard of one", said Doug Whitley, President of the
Illinois Chamber of Commerce.
Many of the ideas Governor Blagojevich proposed to fund this
year's capital budget were rejected last year by
legislators. The Governor will try again to encourage the
Legislature to sell off the State Lottery, sweep special funds,
raise casino taxes and sell the 10th casino license, securitize
the tobacco settlement money, and refinancing state debt.
Several lawmakers were skeptical of his plan. "There is
so much unsaid about this budget. There a lot of unanswered
questions", said Senate Minority Leader Frank Watson
(R-Greenville).
The RCGA will advocate
strongly this session on passage of a capital bill. There
are several vital infrastructure and education projects that
must get started to sustain economic growth in Southwestern
Illinois (see sidebar).
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UPCOMING EVENTS
.
March 4: LEED Design Workshop
from
8:30 a.m. to 5:00 p.m. at the
RCGA Regional Collaboration Center on the 12th Floor of One
Metropolitan Square. Conference will cover technical
requirements, certification process and case studies of LEED for
New Construction. To register, visit the U.S. Green Building Council web site or
contact Emily Andrews at the U.S. Green Building Council - St.
Louis Chapter at emily.andrews@mobot.org or at (314)
577-0854.
.  March 5: RCGA
Legislative Breakfast at the Capitol Plaza Hotel in
Jefferson City from 7:00 a.m. to 8:30 a.m., sponsored by
General Motors. General Motors' Assembly Plant
in Wentzville employs 2,200 and makes full size vans, like the
GMC Savanah. For more information and to RSVP, contact Marlo
Young at myoung@stlrcga.org or at (314) 444-1134 by
Friday, February 29th.
. March 12: RCGA Illinois Lobby Day Reception
in Springfield at the Sangamo Club from 5:30 p.m. to
7:30 p.m. To RSVP, contact Kevin Riggs, RCGA Director of
Illinois Government Affairs, at kriggs@stlrcga.org or (314)
444-1108.
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The RCGAdvocate is published
periodically to inform RCGA members and government officials
about important public policy matters at the state, federal and
local levels. It seeks to provide timely, in-depth coverage on
regional issues, and, at times, to call RCGA members to action.
We welcome your comments and suggestions.
Chip Casteel ~ Senior V.P. of Public
Policy ~ (314) 444-1107 ~ ccasteel@stlrcga.org
Susan Stauder ~ V.P. of Infrastructure & Public
Policy ~ (314) 444-1155 ~ sstauder@stlrcga.org
Kevin Riggs ~ Director of Illinois Government Affairs ~ (314)
444-1108 ~ kriggs@stlrcga.org
Eric Schneider ~ Director of Public Policy Research ~ (314)
444-1148 ~ eschneider@stlrcga.org
Christine Snively ~ Project Manager ~ (314) 444-1144 ~ csnively@stlrcga.org
Marlo Young ~ Executive Assistant for Public Policy ~ (314)
444-1134 ~ myoung@stlrcga.org
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The House Appropriations Committee on
Transportation and Economic Development, chaired by
Representative 
Legislators and government affairs professionals
attended the February 20th RCGA Legislative Breakfast at the
Capitol Plaza Hotel, sponsored by the Ford Motor
Company. The breakfast, hosted by RCGA
Public Policy Council member Tony Reinhart, Regional Government
Affairs Director for Ford Motor Company, provided
an informal setting for legislators and government
affairs professionals to start their day at the Capitol.
The RCGA hosts bi-monthly breakfasts at the Capitol Plaza from
7:00 a.m. to 8:30 a.m., if you are in Jefferson City, please
join us! See Upcoming Events for the next breakfast on
March 5.
