St. Louis, MO – On Thursday Missouri Governor Jay Nixon signed into law a targeted tax cut aimed at small businesses.
The governor attended a ceremonial signing at McArthur's Bakery in South St. Louis County.
The legislation provides a tax break for businesses with less than $10-million in assets by eliminating the Missouri Franchise Tax creating a savings of about $875 for some 16,000 businesses.
Nixon says while the savings may be small, it does reflect a commitment to small business which he says are the main diver of the Missouri economy.
"And that's why with a very difficult budget that we're in this year, with extremely challenging financing that we have and the limited dollars that we have, we thought that sending this signal was the important signal to send," says Nixon.
Randall McArthur is President of McArthur's Bakery. He says the savings is a drop in the bucket compared to increases he's had to pay in property tax and healthcare.
"It'll pay the increase that I have in health insurance for one month, so it helps," says McArthur.
McArthur notes that unlike firms like Chrysler, he's grown his business without the benefit of state tax credits.
"I have to think that if we would take the money and the time and resources that we spend trying to woo some of these big companies that are not exactly solvent to begin with...how many jobs could really be created and sustained," says McArthur.
Missouri is currently at a 25-year high in unemployment with 250,000 unemployed in the state.
With 18 days left in the fiscal year, Nixon says there is still quite a bit of spending that needs to come out of next year's budget.
The governor wouldn't specify a number beyond saying "at least nine figures".