Business community optimistic about future of Missouri’s economy
JEFFERSON CITY, Mo. – The American Legislative Exchange Council (ALEC), a capitalist, free-market think tank, released a study Monday naming Missouri as the 24th ranked state in terms of economic outlook, despite ranking 41st in economic performance.
The conservative organization mainly examined tax policy, scoring states with lower tax rates for businesses and individuals higher.
Jonathan Williams, the chief economist for ALEC, said competition was driving the changes.
“States that have adopted pro-growth policies have enjoyed robust economic expansion, with greater wage growth and more opportunities for citizens,” Williams said in a statement. “The facts remain clear that pro-growth policies are working and there is a clear trend in favor of market-oriented reforms.”
However, whether or not that outlook index translates into an actual strong economy, remains to be seen. A study from Governing Magazine in 2016 graded states on margins like GDP per capita, percent changes in personal income per capita, and state unemployment rate changes to determine the best state economies in the United States. Many states at the bottom of ALEC’s list, like California and Oregon, topped Governing’s list. Others, like Florida and Utah, were near the top of both lists.
Ray McCarty, the president of the Associated Industries of Missouri, questions the validity of these kinds of rankings.
“I’m very hesitant to give much weight to those types of rankings,” McCarty said. “It depends on what they include and what they exclude where you end up higher or lower on the chart, so I don’t really put a lot of stock in them.”
Still, he does believe the state is on the upswing, pointing to statistics like the sky-high 66.6 purchasing manager’s index (PMI), a metric used to measure the strength of the state’s manufacturing sector. In addition to that, the Department of Economic Development stated Tuesday the unemployment rate shrank to 3.9 percent in March, its lowest rate since the Great Recession. That figure had been shrinking since Dec. 2009 when it peaked at 9.8 percent.
Hart Nelson, the vice president of public policy at the St. Louis Regional Chamber, added that changes in government at both the state and local level had instilled a great deal of confidence in the economy after nearly eight years of increased regulation under the Obama administration. The election of Gov. Eric Greitens, he says, brought with it the promise of a great deal of regulatory reform.
“This is an administration that is going to take a solid look at regulations and rules that we have in the state and the one’s we need, he’s going to keep. The ones that might need to be changed in order to be useful, he’s going to do that and make that happen. And the ones keeping businesses from being successful, he’s going to get rid of,” Nelson said.
At the federal level, he said President Donald Trump had also instilled that anti-regulatory atmosphere, with the additional promise of nearly $1 trillion proposed for national infrastructure projects.
All in all, McCarty says there’s a general sense of optimism from Missouri’s business community, and he even believes a cure for Missouri’s budget woes will come in the next few weeks as the state receives more filed taxes.
He, like Nelson, is excited to see if Trump and Greitens remove the “shackles on the business community” placed their by their predecessors.