Economic Development News
Summarizing the Chamber's Economic Development
Published: Friday, May 25, 2018 3:00 pm
By: Randy Allen
The Jefferson City Area Chamber of Commerce Economic Development staff recently presented the 2017 Economic Development Annual Report to the City of Jefferson and the County of Cole at a joint work session at the. This report represents the 10th prepared and presented to the City and County outlining the results of the work the Chamber Economic Development Program funded in part thru Contracts with the City and County. The entire report can be found here
The report is divided into the following Activities.
ACTIVITIES and RESULTS REPORT
- Economic Policy and Planning
- Commercial - Industrial Site Management
- Return On Investment
- Community Development Projects
- Expansion Projects & Facilitation
- Small Business & Community Outreach
- Business Attraction
- Workforce Development
RETURN ON INVESTMENT (ROI) UPDATE
In addition to the many indirect benefits of the Economic Development Program, the Chamber calculates a Direct Return on Investment from the facilitation of new jobs and wages created in Cole County.
This assessment is a very conservative approach and does not include any multiplier effect used in other Economic Benefit Models. This method anticipates the return in tax revenue to the City of Jefferson, Cole County and Public School Districts in the County from the new wages created. This calculation began in 2007 as a result of research indicating the growth in the amount of Wages in a jurisdiction led directly to the health of a local economy. We studied the relationship of this and found that the correlation between growth of wages and the Sales Tax and Property Tax revenue was very close. Since 2007 for example the County Assessed Value has increased 14.38%. The Taxable Sales on Goods (Sales and Use Tax) in that same period grew by 13.49%.
The total wages paid in the County increased 16.83%. FIGURE 1 Shows the close correlation of these three numbers from 2007 to 2016 except during the recession of 2008-09.
Our ROI calculation is based on this close correlation and assumption that when more jobs are added to an economy and total wages rise, for every new $100 of wages, the City and County combined can expect to see an increase in revenue of $2.57 from increased Sales Tax and Property Tax occurring from these new wages. County Schools expect to see an increase in Revenue of $2.48.
During the period of (2007-2017), existing business expansions facilitated by the Chamber have led to a total of 1669 new jobs and over $54,556,000 of new payroll wages with an average of more than $39,000 annually per job. In addition to this, business attraction projects have added 371 jobs and $12,056,859 of yearly payroll wages. The direct sales and property taxes anticipated from these ongoing annual wages is more than $6.3m for the City and County and more than $6.9m for Cole County Schools.
2017 CHAMBER OPERATING BUDGET UPDATE
Figure 2 shows the 2017 sources and uses of funds for the Chamber. On the income side, the Chamber has four major categories of revenue support for its operating budget. These include the Economic Development contract with the City for $185,000, the Economic Development contract with the County for $150,000, $376,033 from Chamber Membership Investments and finally $234,497 from Chamber events and other miscellaneous income. The total budgeted commitment to the ED program was $335,000. On the spending side, total expenditures for economic development were $551,728 or $216,278 more than the base level funding of $335,000. This additional support was provided by the chamber membership through their investment and other support.
The Jefferson City Area Chamber of Commerce continues to be proud of the Economic Development Program it provides on behalf of its 1800 members and the citizens of Jefferson City and Cole County. We look forward to the future as we work hard achieving continued economic growth and prosperity.