Post on 13-Dec-2015
Economic Development:Opportunities and Challenges
Stacey E. PickeringMississippi State Auditor
September 30, 2015
Stacey E. Pickering
Mississippi State Auditor
Stacey E. PickeringMississippi State Auditor
We Seek, They Seek
MDA Global Recruitment Team Domestic and overseas companies Helps identify and secure buildings and site locations
MDA Asset Development Team Helps MS communities capitalize on existing resources Helps communities plan for future opportunities
MDA Marketing Team Promotes investment and job creation Provides public relations and marketing/advertising
Know the possibilities Develop compatibility models Understanding demographics, workforce capabilities Industry experts Examine Risks
Stacey E. Pickering
Mississippi State Auditor
Stacey E. PickeringMississippi State Auditor
The Process:“Super Projects”
Preliminary projects = code words Site selection, confidential agreements, teamwork
state and local level
Highly competitive Can be lost by leaks May take months
Developed projects brought to Legislature Preliminary agreements on incentives, obligations,
commitments Legislature, then Governor approves
THEN…
Stacey E. Pickering
Mississippi State Auditor
Stacey E. PickeringMississippi State Auditor
The Process: All Projects
MDA Contract Agreement Details amongst all parties (company, state, local,
etc.) Multiple incentive programs defined
State Bond Commission Issues Bonds Governor, Treasurer, Attorney General Sells the bonds to finance the project
Department of Revenue Approves/verifies MDA tax incentive agreements
Auditor Old “project” auditing process New “program/project” process
Stacey E. Pickering
Mississippi State Auditor
Stacey E. PickeringMississippi State Auditor
Since 2000, OSA has monitored more than 2o projects
Currently, still 13 projects active $990,900,000 of taxpayer
funds
Recently, 2 projects paid audit related penalties of $409,866
New authority (July 1, 2014) Enhanced program auditing Includes other MDA
economic development program areas
Projects Currently Monitored by OSA:
Nissan Howard Industries American Eurocopter Viking Range Baxter Healthcare Pharma Pac IMS (Integrated
Management Services) Severstal Cooper Tire and Rubber Toyota PACCAR Ingalls Schulz XTruded
MS Major Economic Impact Act (MMEIA)
Stacey E. Pickering
Mississippi State Auditor
Stacey E. PickeringMississippi State Auditor
Other Major Programs FY 2014
Advantage Jobs “Super Project” tax
incentives 31 projects
ACE Fund $47.45 million since FY 2009 40 projects
Existing Industry Productivity Loan Program $50.5 million since FY 2009 15 projects
MS Industry Incentive Revolving Loan Fund $293 of $468 million bonds
issued, 10 projects since FY 2010
Development Infrastructure Program (DIP) “$13.3 million since FY
2010 32 projects
Job Protection Act $12 million since FY 2009 30 projects
10+ Other Programs, including Rural Impact Small Municipalities,
Limited Population Counties Workforce Training funds
Stacey E. Pickering
Mississippi State Auditor
Stacey E. PickeringMississippi State Auditor
What We Have Found In the Past
The State Bond Commission does not know how smaller bond issuances will be spent Bonds are sold prior to MDA award Generally for programs of less than $10 million
Smaller projects have a much higher risk of failure and less due diligence conducted by MDA generally
Many weak contracts Few taxpayer protections Lack of job maintenance requirements Inconsistent contracts between projects
Little or no follow-up oversight by MDA after award Failure to conduct site visits
Stacey E. Pickering
Mississippi State Auditor
Stacey E. PickeringMississippi State Auditor
What We Have Found In the Past Failures by MDA to
establish and adhere to verification procedures/deadlines provide procedures for private entity reporting according
to MOUs require recipients to collect and maintain auditable data request certification of compliance to validate
employment numbers clearly define full-time and part-time jobs and job
maintenance monitor MOU requirements to be able to identify
problems request payment for non-compliance
Outside of MMEIA, other programs account for more than $480 million since FY 2009
Stacey E. Pickering
Mississippi State Auditor
Stacey E. PickeringMississippi State Auditor
Economic Development is the lifeblood of our State:
Maintaining and strengthening the businesses and industries we already have
Bringing in new businesses and industries Building and maintaining a highly skilled
workforce
Through audits and education, OSA is working to improve MDA practices so they can better protect
taxpayer funds
The Future
Stacey E. Pickering
Mississippi State Auditor
Stacey E. PickeringMississippi State Auditor
Baby Boomers (1946-1964)
Generation X (1965-1982)
New Boomers (1983-1996)
Total 676455 771487 499823
50,000150,000250,000350,000450,000550,000650,000750,000850,000
Mississippi’s Population By Generation
Source: U.S. Census, 2010
Stacey E. Pickering
Mississippi State Auditor
Stacey E. PickeringMississippi State Auditor
United States Generational Snapshot
Stacey E. Pickering
Mississippi State Auditor
Stacey E. PickeringMississippi State Auditor
Mississippi’s Workforce
Stacey E. Pickering
Mississippi State Auditor
Stacey E. PickeringMississippi State Auditor
Mississippi’s Population
Stacey E. Pickering
Mississippi State Auditor
Stacey E. PickeringMississippi State Auditor
1912 1921 1930 1939 1948 1957 1966 1975 1984 1993 2002 2011$0.0
$500.0
$1,000.0
$1,500.0
$2,000.0
$2,500.0
$3,000.0
$3,500.0
Republican President Democrat President Revenues
Sources: Office of Management & Budget, Historical Tables; Bureau of Labor Statistics; Congressional Budget Office, Long-Term Budget Outlook, June 2012. Compiled by TCAII
14
Federal Spending & U.S. Revenue Trends
Stacey E. Pickering
Mississippi State Auditor
Stacey E. PickeringMississippi State Auditor
Federal Public Debt
19001911192219331944195519661977198819992010202120320
50
100
150
200
250
CBO Alternative Projection
Source: CBO, Long Term Budget Outlook, 2009 and 2013
Stacey E. Pickering
Mississippi State Auditor
Stacey E. PickeringMississippi State Auditor
1.Australia
2.Sweden
3.Estonia
4.New Zealand
5.China
6.Chile
7.Luxembourg
8.Denmark
9.Brazil
10.India
11.United Kingdom
12.Israel
13.Canada
14.Poland
15.Netherlands
16.Korea
17.Slovakia
18. Mexico
19. Austria
20. Norway
21. France
22. Finland
23. Slovenia
24. Germany
25. Belgium
26. Spain
27. Italy
28. United States29. Hungary
30. Iceland
31. Ireland
32. Portugal
33. Japan
34. Greece
Sovereign Fiscal Responsibility Index(As of April 2012)
Source: Comeback America and Stanford Graduate Students’ Sovereign Fiscal Responsibility Index. Compiled by TCAII. Note: Based upon IMF data that was reported in April 2012.
Stacey E. Pickering
Mississippi State Auditor
Stacey E. PickeringMississippi State Auditor
Thank You
Stacey E. PickeringMississippi State Auditor
P.O. Box 956Jackson, MS 39205Ph: 601-576-2800
800-321-1275 (statewide)Web: www.osa.ms.gov
Twitter: @StaceyPickering