This week, the U.S. Commerce Department reported that Missouri’s economic growth placed the state 43rd in the country last year. It is a variation on that eternal question: Is Missouri’s development glass partly full, or mostly empty?
Empty. Definitely empty.
The Commerce Department says Missouri’s economy grew much more slowly last year than the rest of the nation. Department figures rank Missouri 43rd in economic growth last year with an economy that grew by less than one percent. The National average was 1.5 percent. The department studies show almost every sector of the state’s economy grew more slowly than the average or shrank.
New reports today paint a clearer picture of how “less than 1 percent” Missouri’s growth really was .04 percent. Not .4 percent, but .04 percent. For all intents and purposes, that is zero. Throw in Missouri Journal’s report that the state’s new jobless claims increased to the third highest level in the country last month and it is clear Missouri is headed in the wrong direction, at about 80 mph.
Last month, I talked at length about how poorly Missouri has done economically over the last five years, and according to Rich States, Poor States, the state has been stuck around 40th in economic performance for basically the entirety of that period. Not much has changed legislatively in those intervening years to change Missouri’s fate – tax credits are still running amok, income taxes still dominate as sources of revenue, and local “economic development” plans are still off kilter – so the Commerce Department’s findings are not surprising (which is frustrating on its own terms.)
Missouri can do better, and the Show-Me Institute has offered a number of proposals in the last year that would make the state more competitive. Extinguish failing economic development tax credit programs. Eliminate the growth-dampening corporate income tax with the savings gained through tax credit elimination. Fix Tax Increment Financing (TIF). Cut wasteful spending.
It is time for a change.
