PASSING THE BUCKS GOOD FOR MISSOURI'S ECONOMY

In an era when many government programs have done more to harm than help the economy, the state's MO BUCKS program stands out as a shining example of a sound investment.

Missouri officials say it is the number-one program in the nation in linked deposits.

Cape Girardeau has experienced the benefits of the program first hand. Last week, Treasurer Wendall Bailey announced that three Cape manufacturing firms would receive $6.8 million in low interest loans, which would help create 272 local jobs.

Under the program, the state treasurer deposits state funds in Missouri banks at a rate that's 3 percent below the normal deposit rate. In turn, the banks loan the money at low-interest rates to farmers, small business and industries.

The program was born in the midst of the farm crisis of the mid-1980s as a way of trying to help the agricultural economy. That year, some $50 million was loaned to Missouri farmers.

In 1986, the legislature approved MO BUCKS as a way to aid farms and small businesses. In 1988, the program was expanded to industries in an effort to create more jobs. Since then, nearly $100 million has been loaned to industries and used to create or save almost 14,000 jobs. Another $155 million is available for farms, and $50 million for small business loans.

The program's success rests not just with the state treasurer's office, but also with the banks and the businesses that have made use of the low-interest deposits.

Any Missouri bank is eligible for such state deposits. The state money is invested in various banks on the basis of applications made by companies seeking the low-interest loans. The loans are made for one year. If the company continues to expand, it can make application for another low-interest loan. Under the program, a company must create at least one job for every $25,000 it receives in low-interest loans.

And that's a good investment. For every job created, the state annually receives about $1,200 back in taxes. In addition, the business grows, which in turn helps the state's overall economy.

The Missouri treasury has about $1 billion. Even with the lower interest earned off deposits in the MO BUCKS program, the state earned in excess of $84 million last year.

When it comes to improving Missouri's economy, there's something to be said for passing the bucks.