Putting State Money to Work
It was a short week at the State Capitol this week. Our offices were closed on Monday for the Martin Luther King Jr. holiday and winter weather prompted early adjournment on Wednesday. Before heading home to beat the storms, legislators gathered in a joint session to hear Missouri Supreme Court Chief Justice George W. Draper III deliver the annual State of the Judiciary Address. We also had two full days of committee hearings.
The highlight of the week for me was seeing Senate Bill 599 clear the Insurance and Banking Committee. This legislation makes important changes to the Missouri First linked deposit program, ensuring that small town businesses, farms and other rural enterprises will continue to have access to the money they need to expand and succeed. I presented this bill to the committee last week and was joined by Missouri’s state treasurer in calling for its passage.
Missouri First is an example of smart government in action. As the keeper of Missouri’s bank accounts, the state treasurer deposits some of the state’s money in local banks. Those institutions then leverage that money to make reduced-interest loans to Missouri farms and small businesses. The money is going to sit in a bank account somewhere anyway. The state might as well put it to work helping local communities grow.
Having spent two decades in the banking business, I’ve seen first-hand how this program creates jobs and spurs economic development. This is the second year that I’ve introduced this legislation. Last year’s bill also passed out of committee, but we didn’t have time to take it up in the Senate chamber. With early committee approval this year, I’m hoping the bill makes it all the way to the finish line.
Currently, total state participation in the program is capped at $720 million. My legislation raises that limit to $800 million, allowing Missouri FIRST to continue to make loans as increased demand pushes the program closer to its lending ceiling. The program allows aggregate deposits up to $330 million to be allocated to farming operations statewide, $220 million for eligible job enhancement efforts, $110 million to small businesses and the rest divided between various other categories. Senate Bill 599 raises the cap for small business loans to $190 million.
Another big change in this year’s version of the bill is a requirement to give priority to maintaining existing deposit agreements, before funding new applications. We want to make sure that businesses that are currently relying on the program continue to succeed.
About 160 banks participate in the program statewide and the average loan is under $500,000. Eligible borrowers include farming or livestock operations, agribusinesses, small businesses, multi-tenant developments, residential property developers and others. Local governments may also apply for linked deposit financing.
Missouri First proves state government can have a positive impact in local communities. It’s a clever, innovative use of existing state money that gives a much-needed boost to up-and-coming enterprises in rural areas. It’s a good program and it needs to continue.
It’s my honor to serve as your senator for the 16th District. If you have questions or need any assistance, please call my office at 573-751-5713 or log onto my webpage at https://www.senate.mo.gov/brown for more information.