Stacey E. Pickering Mississippi State Auditor September 30, 2015.

Economic Development:Opportunities and Challenges

Stacey E. PickeringMississippi State Auditor

September 30, 2015

Stacey E. Pickering

Mississippi 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



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



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



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



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



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



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



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



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



United States Generational Snapshot

Stacey E. Pickering



Mississippi’s Workforce

Stacey E. Pickering



Mississippi’s Population

Stacey E. Pickering



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



Federal Public Debt

19001911192219331944195519661977198819992010202120320

50

100

150

200

250

CBO Alternative Projection

Source: CBO, Long Term Budget Outlook, 2009 and 2013

Stacey E. Pickering



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



Thank You


P.O. Box 956Jackson, MS 39205Ph: 601-576-2800

800-321-1275 (statewide)Web: www.osa.ms.gov

Twitter: @StaceyPickering

http://www.osa.ms.gov/

Stacey E. Pickering Mississippi State Auditor September 30, 2015.

Documents

Transcript of Stacey E. Pickering Mississippi State Auditor September 30, 2015.