JEFFERSON CITY – Missouri Chamber President Dan Mehan and Missouri Chamber Vice President Tracy King testified today in support of legislation that would help establish new industry sectors in Missouri. Senate Bill 120, sponsored by Sen. Eric Schmitt, would provide incentives for businesses that forward freight internationally through Lambert Airport in St. Louis.
Senate Bill 46, sponsored by Sen. Mike Parson, would provide funds to encourage more data centers to build in Missouri. Both would create thousands of new jobs by helping establish industries that are expected to grow exponentially in the coming decades. Mehan has played an important role in the effort to expand international trade in Missouri. As chairman of the Midwest Hub Commission, he can speak first-hand about the importance of SB 120.
“Added incentives of this type will continue to shed a favorable light on St. Louis and Missouri during trade negotiations and bring us one step closer to securing valuable partnerships in North America and worldwide,” Mehan said. “It will pay huge dividends not only for the St. Louis Region, but the entire Midwest. And Missouri will be in the center of that activity.”
Key to the proposition is positioning air-cargo freight forwarders near Lambert-St. Louis Airport. A real opportunity exists for those shippers to locate in and ship worldwide from Missouri. Under this legislation, qualified freight forwarders would receive tax credits against income tax, based on the volume of outbound air cargo. The credits are capped at $7.5 million per year.
“It is important to note that Missouri only offers this incentive if exporting activity occurs. That is one of the strengths of how this legislation is crafted,” Mehan said.
The benefit of establishing Missouri as a trade hub is broad reaching. “Missouri farmers, manufacturers and retailers will all benefit from the new lines of trade opened by an international trade hub,” Mehan said. “It helps us leverage one of our strongest assets – our location in the center of our nation. In addition, more cargo activity leads to reduced shipping costs and more competitively priced Missouri exports. The synergistic effect is a greater worldwide demand for Missouri manufactured products.”
Members of the Midwest Hub Commission have aggressively reached out to freight forwarders and cargo carriers over the past year to identify market opportunities and affirm commitments to moving freight in and out of St. Louis.
During the same Senate Committee hearing, testimony was heard on SB 46, legislation to spur growth in the data center industry.
“Data centers are a way to create jobs and secure additional state revenues in Missouri,” said Tracy King, Missouri Chamber vice president of governmental affairs during testimony. “Decisions are being made where to place data centers right now and as a state we need to secure our share in this opportunity.”
Data centers, King explained, provide the “infrastructure” that allows the Internet to operate. Data centers are basically the “warehouse” for processing data. Data centers are crucial component of business today and are crucial for hospitals, universities, financial institutions, and utilities.
“The data center industry is a $100 billion industry worldwide, growing at a rate of 8 percent annually,” King said. “It is a $20 billion industry in the US alone. If Missouri were able to capture even 5 percent of that investment, it would mean $1.5 billion of private investment for data center construction plus another $1.3 billion for tenant IT equipment.”
Missouri is losing out to Iowa, Nebraska, Kansas, Oklahoma and other Midwestern states.
“Neighboring states offer tax incentives including sales tax exemptions and personal property tax exemptions and abatement,” King said. “Under current incentive conditions, a 100,000 square foot data center costs $15 million more to locate in Missouri than in competing states.”
Microsoft, Yahoo, and Google have already located large operations in Iowa, Nebraska and Oklahoma, King said.
The Missouri Chamber of Commerce and Industry (www.mochamber.com) was founded in 1923 and is the largest business organization in Missouri, representing almost 3,000 employers, providing more than 425,000 jobs for Missourians. ###