Columbia's EEZ Board votes to expand job creation requirement

Tuesday, July 24, 2012 | 9:36 p.m. CDT; updated 10:31 p.m. CDT, Tuesday, July 24, 2012

COLUMBIA – At its Tuesday meeting, the Enhanced Enterprise Zone Board voted to recommend that a company create at least 10 jobs to qualify for tax abatement.

The enhanced enterprise zone is a state-run tax incentive program meant to encourage businesses to expand or locate within the zone. To qualify for state tax credits, a business must create a minimum of two jobs and invest at least $100,000 for a new or expanded facility or $1 million for a replacement facility.

Local zones, however, are allowed to create higher thresholds. 

Tuesday's discussion carried over from the board's previous meeting on July 2, when board member Jeremy Root asked that the motion to raise the minimum number of jobs be tabled in order to allow more time for discussion.

"Two seems a little minimal," said Randy Morrow, vice president and chief operating officer of Boone Hospital Center. He asked Bernie Andrews, executive vice president of Regional Economic Development Inc., if he had any guidance on the matter.

Andrews said businesses looking to come to Columbia were usually talking about creating tens to hundreds of jobs.

"I'd hate to see it above 10," Andrews said. "We talked about that internally."

There was some discussion of raising the minimum investment level as well, but the board voted unanimously to leave it at the state minimum and increase the minimum number of jobs to 10.

Two of the seven board members, Louis Gatewood and James Whitt, were absent.

Job accountability standards

Boone County Collector Pat Lensmeyer presented a draft agreement regarding quarterly reports on jobs created by businesses receiving EEZ benefits. The document is the product of the board's Jobs Accountability Subcommittee, which consists of Whitt and Lensmeyer, and would include detailed employment figures.

The agreement would be between the Missouri Department of Labor and Industrial Relations Division of Employment Security and the Columbia/Boone County EEZ. Lensmeyer said that there would be some confidentiality issues with securing employment data — which would include partial Social Security numbers and wage information, among other things. Lensmeyer said there would also be a charge from the Division of Job Security to create and provide the reports.

Although no other zone uses this method of oversight, Lensmeyer said she supports the greater accountability. "This is a verifiable way to have that information," she said.

Andrews said the cost should not exceed $500 per year.

John Strotbeck, plant manager of Kraft Foods and chair of the board, said he did not think the city would balk at the cost of verifying the employment level of the businesses receiving tax breaks.

Lensmeyer said the draft agreement was as complete as it could be until more decisions are made about the EEZ. The board suspended the subcommittee after accepting the report.

Discussion of NAICS codes

The board spent some time discussing what industries, defined by North American Industry Classification System codes, should qualify for the program but did not make any decisions on what type of industries to include or exclude.

The first EEZ Board voted to exclude tobacco-related industries and animal slaughterhouses.

Andrews asked that the board begin with manufacturing codes, since those were the original targets of the program.

Citing two local wood product manufacturing firms, Root expressed concern about including one business of a particular type within the zone and excluding a local competitor located outside the zone.

"If we're un-leveling a currently level playing field, I don't want to do this blindly," Root said. "I don't know where to go with the concern other than to raise it."

Board member Anthony Stanton said his primary concern was the type of jobs created be targeted to low-skilled workers currently in poverty. However, he does not want to exclude any industries from the eligible list.

"They need to help a particular demographic or we're lying about the purpose of the program," Stanton said. "We have to tailor this to meet Columbia's needs."

Strotbeck said it would be hard to determine what industries would create jobs fitting the criteria advocated by Stanton.

"You may be creating some of both," Strotbeck said. "I'm not sure I can always find the distinction of what kind of jobs are going to be created."

Other business

  • The board unanimously voted to approve a recommendation by Lensmeyer that, if a company receiving property tax abatement through the EEZ program were delinquent on its taxes, late fees be calculated based on 100 percent of the property value.
  • Stanton contacted the Office of Social and Economic Data Analysis to request 2010 poverty data for census block groups so the board could make decisions on the placement of the zone based on the more recent data. The Missouri Department of Economic Development uses 2000 census data to determine eligibility for the EEZ program. He said the maps and data would be available by Aug. 7 and the board members agreed to wait to make decisions on the placement of the zone until they received the information.

What's next?

The board set its next two meetings for 5 to 7 p.m. on Aug. 21 and Aug. 29. 

Supervising editor is Hannah Cushman.

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