More jobs could come to Washington and Franklin County as a result of a new statewide economic development program.
Darren Lamb, community and economic development director for the city of Washington, touted the Missouri Works Program as a way to attract new industry to the state while also helping existing industries grow.
“I think it will help bring jobs to Missouri,” Lamb said. “It (also) helps our existing industries that are here that are growing and expanding.”
Franklin County is in need of better-paying jobs, Census data released last week show.
The median household income in Franklin County dropped in 2012. It was $42,214 in 2012 compared to $52,127 in 2008 when adjusted for inflation.
Also, the county’s poverty rate was 16.2 percent in 2012 compared to 8.5 percent the year before.
Under Missouri Works, a company can keep the state withholding taxes on new hires for five years, and businesses that have been in Missouri 10 years or more get an extra year.
That could add up to significant money for a company, Lamb noted. For instance, he said one company that has been looking at coming to the area could possibly realize a benefit of $118,000 over five years.
“Obviously, the more employees you get, the more you can withhold,” he said.
If a business paid the average Franklin County salary of $35,193, the program would result in a benefit to the company of about $1,000 per employee, per year. So if a company hired 10 new employees, it would result in a total benefit of about $50,000 over five years.
Companies that relocate to Missouri would also qualify for the program because those would be considered new jobs.
A job under the program is defined as at least 35 hours a week, and the company must pay at least half of the employee’s health insurance.
A company must also make a capital investment (such as buildings or equipment) of at least $100,000 over two years to be eligible. And the wages paid to the new employees must be at least 90 percent of the county’s average wage.
There is no limit on the amount of state withholding taxes a company can retain over the five years. But another aspect of Missouri Works involves offering tax credits, and they are limited at $106 million for fiscal year 2014 for the entire program; $111 million for 2015; and $116 million for 2016 and forward.
Missouri Works replaces the state Quality Jobs Program. Under the former program, companies had to hire at least 20 new employees over two years, whereas under Missouri Works companies only have to hire two new employees, Lamb said.
The new program makes it easier for companies to qualify for the program because they do not have to do a major expansion, such as a new manufacturing line, in order to get a benefit, Lamb said.
“You don’t have to create as many jobs and so that helps us out quite a bit,” Lamb said, adding that Franklin County is considered a rural county.
Also, under the former program, industries had to pay 100 percent of the county’s average wage, and under Missouri Works they only have to pay 90 percent.
But the former program did not require companies to make a capital investment like Missouri Works, which requires $100,000 be spent.
Lamb said more companies in Washington may be eligible for the new program compared the former one. There could be about 10 companies in Washington that could take advantage, he said.
“I have been making some visits to some companies that I know of that could take advantage of it right away,” Lamb said. “This is a new benefit that they haven’t been able to take advantage of.”
He noted that the Legislature passed the incentive program this year, and it took effect Aug. 28.
Meeting on Program
There will be an informative session on the program for local businesses Wednesday, Oct. 9, at 2 p.m. at Washington City Hall. A representative from the Missouri Department of Economic Development will be there to explain the Missouri Works Program.