JEFFERSON CITY — Their diagnoses are different, and so are their proposed remedies.
The three leading candidates in Missouri’s gubernatorial race hold divergent beliefs on whether the economy is good, bad or mediocre. And they promote varying plans to strengthen it.
Democratic incumbent Bob Holden views Missouri’s economy as improving, citing the job-creating policies and actions of his administration as part of the reason. He wants another four years in office to work toward a rather lofty goal.
“I think Missouri’s economy is coming back, but I will not be satisfied until every working Missourian can find a good-paying job in this state,” Holden said.
Opposing him in the Aug. 3 Democratic primary is State Auditor Claire McCaskill, who claims Holden — despite good talk — has failed to produce results when it comes to fixing the state’s economic backbone, particularly its roads. She compares the state to an ailing hospital patient.
“Our economy is out of the emergency room, but I think we’ve downgraded the condition from critical to serious,” McCaskill said.
The leading candidate in the Republican primary, Secretary of State Matt Blunt, believes Missouri’s economy is somewhere between good and poor, with any improvement resulting primarily from tax cuts signed by President Bush. He seeks to boost Missouri’s economy by making the state more business-friendly.
“If we are going to reach our full economic potential, we have to create an entrepreneurial climate,” Blunt said.
Although there are many ways to measure an economy, politicians often cite job figures. Yet those, too, can provide different impressions.
For example, Missouri gained about 17,000 jobs from July of last year through May 2004, according to the federal Bureau of Labor Statistics. Yet since Holden took office in January 2001, Missouri had a net loss of about 28,000 jobs through May 2004.
As part of his case for re-election, Holden cites specific examples of jobs saved or created.
Foremost is the decision by Ford Motor Co., after heavy lobbying from Missouri officials, to reverse plans to close its Hazelwood plant. That saved 2,600 jobs, at least for a while. Ford still plans at some point to eliminate a shift, and 1,000 jobs.
Among others successes Holden highlights are Ford’s decision to build a hybrid SUV in Claycomo; American Airlines’ decision to keep its overhaul base in Kansas City; and the decisions by CitiMortgage Inc. and a division of MasterCard Inc. to build headquarters in O’Fallon.
Holden also touts several bills he has signed into law. One authorizes downtown redevelopment incentives. A second requires more accountability measures from recipients of state tax credits. And a third, which he calls “Jobs Now,” eliminates a few tax credit programs and uses the savings to fund $12 million in annual grants for local public works projects. That new law also expands job training incentives to cover existing, instead of only new, employees. And it allows more areas of the state to set up tax-break zones for businesses.
Despite budget troubles, Holden said, funding for public schools has risen during his administration — an essential element in building the work force. In a second term, Holden said, he would try to direct more money to higher education and help universities better transform their research into commercial products.
Holden’s claims aside, McCaskill contends Missouri’s job incentives are not as focused as they should be, and do not target the right kinds of businesses.
McCaskill said Missouri needs to wean itself off expensive incentive packages for large employers and instead try to help small and mid-size businesses expand their payrolls. Without being specific, McCaskill said she has talked with many businesses that moved from Missouri to Kansas without ever receiving a call from Missouri officials trying to keep them here.
While Holden cites recent job growth figures, McCaskill cites the overall job loss during his administration and Missouri’s status at one point among the leading states in lost jobs, even though that has reversed some in more recent months.
She said Holden’s “Jobs Now” plan misses the mark by spending state dollars on local projects — and, even then, not enough to make much of a difference. Instead, McCaskill said, the state should direct that money to fixing its roads, which rank among the worst in the nation.
A good transportation infrastructure and educated work force are among the essential elements in building a strong economy, she said. McCaskill also proposes a new tax credit for professional services businesses.
Blunt’s economic plan is based on the belief that direct state aid — such as grants and tax credits — are less critical than indirect aid, such as laws, rules and policies that help keep businesses’ costs down.
He supports several bills backed by the Republican legislative majority that have been vetoed by Holden or stalled by Democratic legislators. Among them is a measure to overhaul the state’s workers’ compensation laws, in part by making it harder for some workers to pursue benefits for injuries. Blunt also supports efforts to restrict personal injury lawsuits — specifically in alleged medical malpractice cases, but also in others that target businesses of all types.
Blunt said the state should consider reducing or eliminating its franchise tax, which businesses pay for the right to operate in Missouri. Taxes always are harmful to economic activity, Blunt said. He has criticized Holden’s repeated proposals to generate revenue by raising certain taxes or taking away existing corporate tax breaks.
While supporting tax credits for job training and hiring employees, Blunt said the state shouldn’t focus on granting tax breaks to specific businesses, but rather on improving the business climate for all.
Blunt bases his economic assessment of Missouri partly on a U.S. Chamber of Commerce report that ranked Missouri’s business climate 41st in 2003.