From Site Selection magazine, November 2000
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Massachusetts
Gov. Paul Celluci signed a $21.37 billion budget for fiscal year 2001 while approving tax cuts of more than $175 million. The budget includes a $187 million increase in direct aid to local school districts and a $20 million Housing Trust Fund to help make home ownership more affordable for Massachusetts workers whose wages have not risen as swiftly as the cost of housing.
The tax cuts are targeted and immediate. The new tax deduction for charitable giving allows state taxpayers to deduct up to 50 percent of their adjusted gross income, amounting to an estimated savings of $175 million in the first year alone. The budget also provides a hidden tax cut by freezing the gas tax at 19.1 percent of the average wholesale price, or 21 cents per gallon, whichever is higher. The governor contends that increasing the tax by even one cent to 22 cents per gallon would hit motorists with an additional $2.3 million in taxes.
Celluci also signed a bill to close the funding gap on the Central Artery/Tunnel project to allow "the vitally important economic development project" to continue to move forward. The $2.4 billion plan covers the anticipated $1.4 billion cost overrun at the "Big Dig" while providing a financial reserve for statewide road and bridge projects and any unexpected costs. About $1.35 billion of the funding will be borrowed against projected annual revenues of $100 million in registration and drivers' license fees.
Governor: Argeo Paul Celluci (R) 617-727-3600
Gov. John Engler continued his trend of pushing pro-business legislation by signing a number of bills targeting economic development and industry recruitment -- particularly in the high-tech sector. House Bill 5443 amends the Michigan Economic Growth Authority law by allowing high-tech companies eligibility for Single Business Tax credits for job creation projects. To be eligible, companies must spend at least 25 percent of their operating budget on research and development, and they must create five jobs initially and 25 jobs over the next five years. House Bill 5767 provides an industrial property tax abatement incentive that allows for the freezing of property taxes for up to 12 years to finance the renovation of aging plants or the reduction of property taxes by 50 percent for the expansion or building of new plants in Michigan. This bill amended the existing law to add high-tech companies to the eligibility list.
House Bill 5766 allows the creation of up to 10 High Technology Smart Parks throughout Michigan. These technology parks are intended to create clusters of technology businesses, co-located with research institutions, to provide easy collaboration. The legislation allows municipalities to use tax increment financing for the following uses: property acquisition, infrastructure, building or operating of business incubators and other park facilities, and the management and marketing of the park.
In other economic development legislation, Michigan passed four bills increasing the number of brownfield redevelopment projects. Tax credits will now be allowed for the restoration of blighted and functionally obsolete properties, not just contaminated sites. One bill increases the maximum Single Business Tax credit for brownfield redevelopment from $1 million to $30 million. Also, Senate Bill 1251 amends the current Renaissance Zone Act to allow the creation of 10 new zones targeting the agricultural processing industry. Renaissance Zones are areas throughout the state that are free of virtually all state and local taxes. The purpose of the program is to spur job creation and investment in needy areas.
Governor: John Engler (R) 517-373-3400
Focusing on foreign trade and land preservation, Gov. Jesse Ventura this year signed measures designed to improve Minnesota as a place to do business. The Minnesota Dept. of Trade and Economic Development developed a two-year marketing plan aimed at increasing sales by Minnesota businesses in Japan. The plan focuses on medical exports, information and environmental technologies and agricultural products, and will include efforts to increase Japanese travel to Minnesota. The state hopes to increase the volume of manufactured exports to Japan by $200 million over two years, to $950 million by the end of 2001. "If we generate that kind of export growth, we'll be generating 4,000 new jobs in Minnesota," said Allen Petersen, deputy commissioner of trade and economic development. The marketing plan also includes guidelines for increasing Japanese investment in Minnesota. The state will also launch a trade initiative with Mexico later this year.
In other activity affecting business, Gov. Ventura issued an executive order directing all state departments and agencies to follow a "no net loss" policy in regards to wetlands. More than 80 percent of Minnesota's original prairie pothole wetlands have been drained and more than 60 percent of the state's original wetland base has been drained, filled or otherwise diminished. The action could effectively block all future commercial development in sensitive areas.
Governor: Jesse Ventura (I) 651-296-3391
Mississippi adopted its most comprehensive economic development legislation in its history on Aug. 30 when Gov. Ronnie Musgrave signed into law the Advantage Mississippi Initiative. The bill -- the result of efforts by the Governor's Office, State Legislature, Mississippi Development Authority and Mississippi Economic Council -- lays out a broad range of financial incentives and new alliances designed to make the state's economy more competitive in the Information Age.
Among other provisions, the Advantage Mississippi Initiative:
Gov. Mel Carnahan signed into law a $16.9 billion operating budget that included significant increases in spending for transportation, agriculture and education. Some $2 billion in state tax revenues will go toward highway improvements, while an additional $250 million in bonds will be issued to accelerate projects currently planned by the Missouri Dept. of Transportation. The fiscal year 2001 budget includes $174 million -- a 9.7 percent increase -- to fully fund a new, more equitable formula for the distribution of K-12 school funding. The budget also includes a $55 million increase to support state colleges and universities, as well as an additional $140 million for capital improvement projects at Missouri's higher education campuses.
Major agricultural initiatives include $404,000 to develop a one-stop center to help farmers implement new and innovative ideas for raising, processing and marketing their products; $542,500 for Missouri's Rural Economic Assistance Program to help rural communities develop long-range economic development plans; and $243,287 to further implement last year's legislation to provide loans and grants for New Generation Co-ops, enabling farmers to establish processing facilities that would allow them to add value to their raw commodities and earn more for their products.
Governor: Mel Carnahan (D) 573-751-3222
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