HBA member Beaman Electric hosted Missouri gubernatorial candidate Kenny Hulshof Thursday for his announcement of a new jobs creation plan at a campaign stop in Springfield. The event was covered by KOLR, KY3, the Springfield News-Leader and others locally. You can watch the television coverage and read the article right here.
October 17, 2008
Hulshof: Tap reserve fund to create jobs
Plan would give rebate to businesses to cover cost of added payroll.
Kenny Hulshof, the Republican candidate for governor, proposed Thursday spending $265 million from the state’s reserve fund to help businesses create jobs and stimulate Missouri’s sluggish economy.
If all of the money is spent, it would create 100,000 jobs, Hulshof said.
Hulshof, who is down in the polls against Democrat Jay Nixon, calls his proposed legislation the Missouri Rebate Emergency Jobs Act — or MORE Jobs.
“What we’re trying to do is really encourage new jobs to be created here and help businesses that are cash-strapped,” he said.
If elected governor, Hulshof said he would push to get the legislation approved by the General Assembly and signed into law by Feb. 1.
Under Hulshof’s plan, businesses would receive a rebate on the cost of adding jobs equal to 6 percent of their added payroll.
If a company added six jobs totaling $300,000 in additional payroll, it would qualify for a rebate of $18,000, paid for by the taxpayers.
To qualify for the government subsidy, the wage for each job would have to be at least 90 percent of the average wage in the employer’s county.
Based on 2004 U.S. Census figures, a Greene County company would qualify for creating a new job paying at least $15.96 per hour — or $33,198 a year.
If a county has an unemployment rate of 7 percent or higher, Hulshof’s plan would designate it an “emergency county” and appropriate an 8 percent rebate for every job created. There are currently 32 counties in the state with an unemployment rate of 7 percent or higher, state figures show.
Hulshof said his jobs plan would cap rebates for non-emergency counties at $6,000 per job and $8,000 per job for emergency counties.
To qualify, employers would be required to create at least six jobs in urban areas and three jobs in non-urban areas.
Missouri’s Budget Reserve fund has about $550 million, half of which can constitutionally be used for emergencies only.
MORE Jobs would contain a “clawback” provision requiring businesses to pay back the money if the job did not remain permanent for a year, Hulshof said.
“We will put safeguards in place to make sure there isn’t any fraud or abuse,” he said.
Citing official state figures, Hulshof said every dollar spent on a job incentive program generates $8 in tax revenues, which would be directed back to the fund to replenish it within three years, he said.
Hulshof acknowledged some Republicans may resist the notion of dipping into the emergency fund to spur the economy.
Hulshof touted his new plan during a news conference at Beaman Electric Co. in Springfield.
The company’s owner thinks it would help him hire new employees while maintaining health care benefits in the face of rising premiums.
“It would help keep good insurance for my employees,” said Lee Beaman, who employs 50 people.
Hulshof’s jobs price tag is the exact amount Nixon proposes spending to restore Medicaid health care services for 400,000 Missourians.
“Coincidentally, it is the same figure,” Hulshof said.
Democrats are skeptical of Hulshof’s plan because tax credits for corporations have a checkered history of producing results.
“Why would we turn to something that hasn’t done what we thought it would do, which is to create more jobs,” asked state Rep. Sara Lampe, D-Springfield.
Lampe, who sits on the House Budget Committee, says corporate tax credits have increased from $186 million to $400 million in the last 10 years.
“We’ve already spent a lot of money in Missouri for tax credits for corporations, and unemployment is higher than it’s ever been,” Lampe said.
While not embracing Hulshof’s plan, Nixon is not ruling out tapping into the state’s reserve fund if he becomes governor.
“Families in our state are hurting, and if we can tap into the Rainy Day Fund in a fiscally responsible way, that’s something we should consider,” Nixon spokesman Oren Shur said.