Area cities moderately comparable to Neosho in size and demographics all use general revenue monies to fund economic development operations within their respective municipalities.
It would likely be some time, however, before Neosho would be in a position to do the same, says the city’s interim city manager.
Next fiscal year’s proposed budget allocates no money to the Neosho Area Chamber of Commerce from the city’s one-eighth cent economic development sales tax, which in the past has been used to largely fund the Department of Economic Development, a wing of the chamber.
Neosho Interim City Manger Harlan Moore has stated that proceeds from the sales tax authorized by the particular state statute it was voted in under cannot be spent on anything but paying for capital improvements.
However, a peek at several cities within a 75-mile radius of Neosho shows that none rely on a dedicated tax to fund economic development efforts.
Moore said the problem with Neosho’s economic development sales tax is that it isn’t an economic development tax at all.
When the one-eighth cent sales tax was approved by voters in 1994, it was actually passed, and later collected under, Missouri State Statute 94.577, according to Moore.
Paragraph 3 of that statute states, in part, that all revenue received from the tax “shall be used solely for capital improvements, including the operation and maintenance of capital improvements, for so long as the tax shall remain in effect.”
The words “economic development” do not appear anywhere in that statute. There is also no mention of activities normally associated with economic development.
Moore contends that while authorization for an economic development sales tax can actually be found elsewhere in the state statutes, it isn’t found in the statute it was approved under.
As to if Neosho might ever consider funding economic development out of the general revenue budget, like other cities do, Moore said “not with the condition the general revenue fund is in right now.”
“Someday, if things start clicking right around here, there’s a possibility it could happen,” he added.
A city-by-city look at how economic development efforts are funded
Nevada
Economic development efforts in Nevada (pop. 8,607 in 2000) are focused out of the city manager’s office.
Nevada is 75 miles north of Neosho. Like Neosho, U.S. Highway 71 passes through the community.
According to city manager J.D. Kehrman, his administrative executive assistant, Julie Lewis, is essentially the point person in handling all business and industry inquiries that come to Nevada. From there, Lewis directs prospects to either Kehrman or to the appropriate issue-specific party. Mostly, however, it’s Kehrman they eventually talk to.
Actual marketing efforts are a collaboration of the city tourism board, which receives funds from a hotel/motel bed tax, and the Nevada Chamber of Commerce.
“That collaboration probably represents the most visible aspect of economic development,” Kehrman said. “But a lot of the behind-the-scenes work, like recruiting, trying to put together deals and discussing incentives, that happens directly out of my office.”
Carthage
Carthage (pop. 12,668 in 2000) funds roughly 80 percent of its chamber of commerce’s economic development budget directly out of the city’s general revenue purse, according to Carthage chamber president and economic development director Sabrina Drackert. Additional funding, for marketing, comes from Carthage Water and Electric, a separate entity under the umbrella of the city. Less than 10 percent of money set aside for economic development comes out of chamber membership dues, Drackert said.
The Carthage chamber’s economic development budget this fiscal year was approximately $137,000, according to Drackert. Economic development efforts are handled directly by the chamber organization.
Webb City
Chuck Surface, economic development director for Webb City (pop. 9,812 in 2000), is directly employed by the city as head of the relatively new Department of Economic Development, which was created three years ago.
The economic development department receives no dedicated tax monies but is entirely funded out of the city’s general revenue coffers, according to Surface. In addition to his salary, public funding for economic development pays for things like traveling to meetings, training, dues, subscriptions, advertising, special expenses, technology and consulting, among other expenses.
One of the latest achievements of the new economic development department, Surface noted, was securing funding for the remodel of a 1950s gas station along Main Street Route 66, which will house the new chamber of commerce offices.
“It’s those types of things that, if you have a little budget, are important to a city because you establish things that wouldn’t get done before (without economic development funding),” Surface said.
He also attributed the establishment of a historic district, the expansion of the city’s industrial park and the continuing revitalization of the downtown area to the efforts of the economic development department.
“But it takes someone dedicated to stay on top of it and do those things,” he said.
Cassville
About 40 miles southeast of Neosho, Cassville (pop. 2,890 in 2000) funds 100 percent of its economic development department from the city general revenue fund, according to department director Lynette Dilbeck. The economic development department operates out of city hall.
Occasionally, Dilbeck said, the Cassville Industrial Development Corporation will help pay for special projects or events, such as business receptions. She said the economic development department also works closely with the chamber of commerce and with the newly-formed Downtown Cassville Partnership.
“We recognize that we’re going to have to pool and use everybody’s brainpower and resources because we are a small city,” Dilbeck said. “But that actually helps us to communicate and make sure we’re all on board and understand the direction of where we’re headed.”
Overall, Dilbeck said the economic development arrangement is “working well.”
“We’ve been very fortunate that sales tax here in Cassville hasn’t been down as much as it has been elsewhere in the state,” Dilbeck said. “We’re coming in on budget and the funding has worked well for us.”
