JEFFERSON CITY, Mo. – Missouri state lawmakers are looking at making majors cuts in funding to the Missouri Technology Corporation (MTC), and it’s leaving a bad taste in some legislators’ mouths.
“I understand that a lot of these companies are what are driving the engine that are actually helping the state in a certain realm,” Sen. Bill Eigel, R-St. Charles, said. “I’d like to be able to have my cake and eat it, too. I’d like to be able to help those companies, but not necessarily expand our tax credit programs.”
“I think that means we should be following policies that will help every company in the state by making Missouri more attractive to businesses overall.”
The MTC, created in 1994, was put in place by the Missouri General Assembly in order to help promote entrepreneurship and grow high-tech companies in the Show-Me State. While the MTC invests directly in startup companies, it also provides funding to organizations that support entrepreneurs.
Since 2011, the MTC has attracted more than $400 million in private investment and has co-invested roughly $35 million in nearly 100 startups, most of which are based in St. Louis.
But where once the legislature was increasing funding to the MTC, now, St. Louis Chamber officials have been fighting to keep lawmakers from zeroing out their budget entirely.
MTC’s appropriation for this fiscal year was near $23 million, but Gov. Eric Greitens’ proposed budget had cut that number to about $5 million. The Missouri House budget further slashed that number to just $1 million.
And in an environment in which the governor and legislature have put a high premium on job growth, many are left scratching their heads as to why these cuts have been made.
One area of growth that has been highlighted in recent months has been the Cortex Innovation Community, just one part of St. Louis’ booming innovation community. Gov. Greitens announced in March that Microsoft would be moving into Cortex, bringing more than 150 employees and investing more than $50 million in local jobs, facilities and software grants.
Many of the local startups that have become part of the thriving St. Louis community were able to do so thanks to the MTC. Companies like Bandura were approved for financing through the MTC IDEA program, allowing them to make the move to Missouri and grow their operation. In fact, according to Mattermark, St. Louis is the fastest growing startup scene in the U.S.
In essence, the MTC serves as one of the tools Missouri utilizes in an effort to promote economic growth.
In an article published by the St. Louis Regional Chamber, Vice President of Entrepreneurship and Innovation Andrew Smith said that advocates for entrepreneurship need to start thinking like actual entrepreneurs and show reasons for investors to continue funding the MTC.
“Smart investors are an entrepreneur’s best friend. They are tough and disciplined, but patient. They know that even the best entrepreneurs don’t succeed every time and that long-term success is a numbers game. They stay at the table even in challenging times,” he wrote. “The Governor is willing to invest a $5 million stake of taxpayer’s money. The Missouri legislature should back his decision and keep his seat at the table. We as advocates for entrepreneurship should focus on getting the biggest, fastest return we can for public leaders seeking a return on investment for all of Missouri. We think MTC has a big role to play in this.”
“I’m torn on an issue like this, because on one hand the type of tax credit programs and the extent to which we are funding our tax credit programs and our corporate welfare programs have, overall, have kind of hurt the state. I think we’re spending and dedicating a lot of tax dollars that could be going to other priorities and we’re increasing the burden on Missourians, making us a little less competitive,” Eigel said.
The question now is whether the Senate will allow the budget to be passed as is, with the significant cuts to MTC, and if so, would Gov. Greitens sign off on it? The answer could soon be coming, as the Senate takes up the budget this week.