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07 October 2011

Rupp: Learning from the Mamtek Deal

During the 2011 regular session and in our current special session, economic development has been and continues to be high on the priority list. We are always looking for ways to attract business to our state, while keeping the Missouri tax dollar safe. As you may have heard, a failed economic development project was brought to our attention, and lawmakers are investigating what went wrong with the project.

The company in question, Mamtek U.S. Inc., an artificial sweetener company, had plans to build a factory in Moberly, creating up to 600 jobs for Missourians. To encourage the company to invest in our state, the city of Moberly put together a financial package of incentives, and the Missouri Department of Economic Development offered Mamtek more than $17 million in incentives for job creation. In an unfortunate turn of events, the company missed its first bond payment to Moberly and the factory remains incomplete. The only positive note is that the economic development tools that the state of Missouri uses are focused on job creation, not just the promise of new jobs. Mamtek did not receive any money — the $17 million was an incentive for employment opportunities and no jobs were created. However, it’s been reported that the city has the weight of Mamtek’s debt on its shoulders.

Upon notification of this unfortunate incident, the Senate took action. The Senate Governmental Accountability Committee was charged with researching the collapse of the project, particularly the role the Missouri Department of Economic Development played in dealing with the company, and who failed to research the financial strength of the company and the documentation that supported its financial ability to build a new plant. It’s important that we learn what went wrong during the evolution of the project, and prevent mishaps from occurring in the future. Please click here to review the committee’s hearing schedule.

Throughout the First Extraordinary Session of the 96th General Assembly, I have been dedicated to making wise and fiscally responsible decisions for the benefit of Missouri business and families. Lawmakers in both chambers are working toward a compromise regarding economic development legislation, and I hope we will be able to come to an agreement. It’s important that we pass a structured bill that will help businesses create jobs, while accomplishing much-needed reforms to existing tax credit and job creation programs.

If you have any questions regarding this or any other legislative matter, please don’t hesitate to contact me at the information below. I always encourage Missourians to be involved in their government, and I welcome questions and comments from my constituents. As always, thank you for the honor of allowing me to serve you.

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