Columbia: Economy

Major Industries and Commercial Activities

Columbia, whose thriving economy has always been based on the education, health care, and insurance industries, is known as a recession-resistant community. Columbia has 13 banks and saving and loans with assets totaling more than $1.6 billion. The city is consistently named as a top place in the nation to live, retire, and do business, in publications such as Money, Entrepreneur, Kiplinger's Personal Finance and Expansion Management. Forbes listed Columbia as a "Best Small Place to do Business" in May 2004. The city is home to Shelter Insurance Company, MFA Incorporated, and is a regional center for State Farm Insurance.

Columbia's manufacturers make and sell a wide variety of products. 3M is a major employer, producing projection lenses, optical equipment, electronic products, and interconnect systems. MBS is a textbook distribution center. There are three different factories making various automotive parts. Columbia Foods, a division of Oscar Mayer, employs about 700 workers at its food processing plant. Watlow-Columbia, Inc. manufactures electrical heating elements; the Square D Corporation makes circuit breakers; and Hubbell/Chance produces electric utility equipment.

Items and goods produced: all manner of electronic parts and equipment, air filters, optic lenses, plastic pipe, custom foam rubber products, automobile parts, coal, stone quarry products, corn, wheat, and oats

Incentive Programs—New and Existing Companies

Local programs

The Columbia and Boone County area's main economic development contact is the Regional Economic Development, Inc. (REDI). REDI is a public/private entity created to promote economic expansion while maintaining a great quality of life. REDI provides services, financing, tax credits and exemptions, job training, and other local perks for businesses such as no local income tax, moderate property taxes and low sales tax that barely effect business, and Community Development Block Grants available outside the city limits for public infrastructure. Financing takes the form of Industrial Revenue Bonds for qualifying projects, and other low interest loans and incentive financing for large development projects. Tax exemptions include no sales taxes on manufacturing equipment nor on materials used to install such equipment, no sales taxes on air or water pollution control devices, and finally a property tax exemption on business and industrial inventories. The State of Missouri reimburses employers for both onsite and classroom job training, designs programs tailor made to specific tasks, and in turn will help screen and test potential new hires.

State programs

The Missouri Small Business Development Center has a branch in Columbia which offers technical and management assistance for small businesses in service, retail, construction, and manufacturing. Other incentive programs are available at the state level. The Missouri Business Expansion and Attraction Group (BEA) is responsible for working with businesses and communities in Missouri to assist in the retention and expansion of existing businesses and the attraction of new businesses. Incentives include business financing and tax credits. Twenty-four programs or services are offered by the Missouri Department of Economic Development, including the Welfare-to-Work Grant program and the Welfare-to-Work Tax Credit program, which encourages employers to hire certain groups, such as ex-felons, who have a harder time finding jobs. There are programs for youths and adults, for workers affected by downsizing or other types of displacement such as that caused by NAFTA, for women, for seasonal or migrant farm workers, veterans' services, and apprenticeship information.

Job Training

The Missouri Department of Economic Development's Division of Workforce Development offers training or retraining of employees, in a classroom setting, in cooperation with the public schools systems. To be eligible for funding, employers must increase employment above the previous year's level, and must retrain existing employees due to substantial capital investment in the state. Fourteen of the Division of Workforce Development's 24 services offered involve job training or retraining, targeted at various groups.

Development Projects

Growing somewhat naturally out of Columbia's strength in the education and health care industries is the biological sciences research business. There are three organizations in the area that promote expansion into this growing field: the Life Sciences Business Coalition, Mid-MO BIO, and Scientific Partnership and Resource Connection, or SPARC. SPARC works with Regional Economic Development, Inc. (REDI) and University of Missouri's College of Agriculture, Food, and Natural Resources to procure funding for research and the building of facilities necessary to research. So far this has resulted in a new $60 million Life Sciences Center which opened in 2004 on the University of Missouri-Columbia's campus, and a proposed $175 million Human Health Research Center.

REDI was also involved in the $5.5 million project to purchase and renovate Boone County Fairgrounds, completed in 2003, and is now working with the Columbia Chamber of Commerce and the Columbia Convention and Visitors Bureau (CVB) on annexing an 80 acre field adjacent to the 134 acre Fairgrounds, and adding an ice skating rink, several playing fields, a dog park, community gardens, and walking trails. The Flat Branch Park beautification project was completed in 2004, with funds contributed by corporate sponsors of REDI, as well as the Chamber of Commerce and CVB, which own the adjacent Walton Building of which REDI is a tenant. Downtown renovation projects have been ongoing for over a decade, and central Columbia today sports widened streets, benches and trees, new street lights and decorative trash can lids, all with an eye to both retail and residential use. The latest is the Eighth Street Beautification Project. In 2002 REDI unveiled its "Incentives White Paper," which proposed more ways to expand established businesses and bring in new ones. It focused on using Chapter 100 bonds but had other ideas such as a "microloan" program to help businesses which didn't fit the criteria for the many other incentive programs offered by REDI. Two other projects are focused on improving traffic flow. One is a new interchange at Highway 63 and Gans Road, which will improve the infrastructure and perhaps pave the way for future development near the intersection, besides allaying traffic woes. The second is a $1.3 million railroad terminal and warehouse made possible through cooperation between REDI and Columbia Terminal Railroad (nicknamed COLT). The terminal itself is expected to cut down traffic on I-70 by giving businesses the option to ship by rail, and the warehouse allows companies that don't have locations near the terminal to nevertheless use the rail option.

Economic Development Information: Regional Economic Development, Inc., 300 South Providence Road, Columbia, MO 65203; telephone (573)442-8303; fax (573)443-3986. Missouri Department of Economic Development, 301 West High Street, PO box 118, Jefferson City, MO 65101, telephone (573)751-4962, fax (573)526-7700

Commercial Shipping

Boone County has 20 Interstate motor freight lines serving it, with 14 terminals in Columbia. Railroads serving the area are COLT (Columbia Terminal), Amtrak, Norfolk Southern, and Gateway Western. Seven air freight carriers serve the area, and Trans World Express offers nine flights daily to St. Louis.

Labor Force and Employment Outlook

Boone County's main area of job growth is in the service industry, although most of these jobs are lower-paying. One recent study found that approximately 33,000 of the area's more than 240,000 civilian labor force was underemployed, meaning they possessed skills, training, or degrees beyond what their jobs required.

The following is a summary of data regarding the Boone County labor force, 2004 annual averages.

Size of nonagricultural labor force: 86,600

Number of workers employed in . . .

trade, transportation and utilities: 14,400

government: 29,200

Average hourly wage of production workers employed in manufacturing: $12.74

Unemployment rate: 3.6% (May 2005)

Columbia: Economy

Largest county employers Number of employees
University of Missouri 11,868
University hospital and clinics 4,320
Columbia Public Schools 3,000
Boone Hospital Center 2,028
City of Columbia 1,168
State of Missouri, (excludes UMC) 1,071
MBS Textbook Exchange, Inc. 1,006
Harry S. Truman Veteran's Hospital 1,000
Shelter Insurance 991
State Farm Insurance 952
U.S. Government (excludes VA hospital) 926
Hubbell/Chance Company 908

Cost of Living

Columbia consistently ranks below the national average for cost of living. The following is a summary of data regarding several key cost of living factors for the Columbia metropolitan area.

2005 (1st Quarter) ACCRA Average House Price: $234,580

2005 (1st Quarter) ACCRA Cost of Living Index: 90.8 (U.S. average = 100.0)

State income tax rate: Ranges from 1.5% to 6.0%

State sales tax rate: 4.225%

Local income tax rate: none

Local sales tax rate: 3.125%

Property tax rate: $6.32 per $100 of assessed value (2004)

Economic Information: Missouri Department of Economic Development, PO Box 118, Jefferson City, MO 65102-0118; telephone (573)751-4241; toll-free (800)523-1434