CAPE GIRARDEAU, MO (KFVS) - Areas in southeast Missouri with high poverty rates have qualified for a new tax incentive program that could help bring in more businesses and create jobs.
The locations of the 161 'Opportunity Zones' throughout the state were announced Tuesday by Missouri lawmakers and is a facet of the Tax Cuts and Jobs Act of 2017.
The zones in Cape Girardeau cover two census tracts East of Kingshighway and South of William Street.
Betty Collins owns Sands Pancake House, and moved her business to South Sprigg street last October, and said she's glad the neighborhood has qualified to be an 'opportunity zone' and thinks the tax incentive could bring more jobs and help the surrounding community.
"I've had quite a few people from this area wanting a job, and I didn't have any openings. I think if there were some available that would be great," Collins said. "They would have more money to spend. It would help me, it would help any other restaurant or retail store."
Alex McElroy, the city of Cape's director of Development Services, described the opportunity zones as another tool for any type of business, from factories to mom and pop shops, to come in and develop the poor part of town.
"The two neighborhoods we picked were at 45 and 48 percent poverty rates," McElroy said. "We really wanted to pinpoint the areas we felt were the most deserving of this opportunity and this is an area that we would just love to see some more investment in."
A cornerstone of the opportunity zone program is giving investors a treasury-certified capital-gains tax deferral, and McElrory says it's structured in a way that encourages long-term investment in hopes of continuing to leverage more development.
"People can invest in these opportunity zone funds and they are no longer taxed by the federal government," McElrory said. "The longer you leave investment into the fund the more benefit you'll get. I'm not sure they've defined the benefit levels yet, but the maximum they put is ten years. If you remove it from that earlier it will be a decreased benefit."
Sheryl Winschel, owns the Golden Needle in Cape and thinks it would be ideal for more manufacturing jobs to come to her district but is concerned there isn't enough vocational training for local workers to fill those positions.
"Any kind of business coming in is going to be great, but if you don't have anybody to work it what good is that," Winschel said. "People here need access to training so that they can apply for the jobs that might come in with the economic boom."
Beside Cape, other 'Opportunity zones' in the region include Poplar Bluff, Sikeston, Kennett, and parts of New Madrid County, Pemiscot County, Ripley County, Wayne County and Washington County.
McElrory says the federal government will likely confirm all of the opportunity zones in Missouri in early May.