MISSISSIPPI SPOTLIGHT
continued...
SS:What else was accomplished in the last legislative session of interest to potential site seekers?
Barbour: A major accomplishment of the regular session was the overhaul of our work-force development and job-training programs. We have moved much more toward one-stop shopping. We have given more of the franchise to our community colleges, which have a demonstrated record of success in work-force development. We have merged the federally mandated work-force investment board with the older, state work force boards to go to where we have one board and one agency. We took the former Employment Security Commission and work force development and job training from the Development Authority, put it into the Employment Security Commission and then ended the commission form of governance there and made it a department under the governor. So we now have a Department of Employment Security, which is much more driven by getting the unemployed skills so they can work, and working to get employers involved in the system so we can take federal money that follows the potential employee and get that employee trained to do the jobs that the employers need done. We feel like we have made a big
step toward improving the system, linking job training to the employers
and employees - getting them together, and we're doing most of it with
federal money. So far we are very pleased with the results. The [federal]
Department of Labor is looking at some of what we have done as models
for the reauthorization of the federal Workforce Investment Act in the
next Congress.
SS: Let's turn to Momentum Mississippi, the long-term, statewide economic development initiative mandated by the Statewide Economic Development Planning Act of 1987. What sorts of recommendations are you looking for from the committee members to include in your 2005 legislative agenda?
Barbour: I expect recommendations about what changes we should make to our incentive programs that are managed by the Mississippi Development Authority for the purpose of job creation. Mississippi was one of the first states in the country, back in the 1930s, to have incentive programs. Historically, the programs were geared to manufacturing. While that is not totally the case today, it is still much more manufacturing-centric in terms of incentives. Today, nationally, a lot of the job opportunities and career tracks in the economy are not in manufacturing. So our Momentum board is about to finish making recommendations on how we should adjust our incentives to recognize that most jobs being created today are not in manufacturing. They are in services, technology, research and development, so that's their first assignment from me. We expect to have a package of recommendations shortly, and we'll make those part of the legislative agenda in January.
The people that elected me more than anything else expect me to help with job creation. We are very focused on that.
SS:Tax incentives are under new scrutiny since the September ruling by three judges on the U.S. Court of Appeals for the 6th Circuit, that Ohio's machinery and equipment investment tax credit is unconstitutional. The ruling calls into question whether many existing or pending investments will be affected. It is not yet clear whether the ruling will stand, but does this episode hurt states' ability to recruit business, or is it a signal that states may simply need to set such incentives aside and concentrate on work-force training or other inducements?
Barbour: We'll see where it ends up. I am confident the Sixth Circuit will rehear the case en banc, and if they come down with a similar decision to what the panel reached, I am confident it will go to the U.S. Supreme Court. So we have a little ways to go there. It's a yellow flag, if not a red flag, particularly for employers. An employer who decided to make an investment in a state, and if part of the incentive is legally questionable, then that's not much incentive. An investor has to make the decision - is this a good enough deal without that incentive to do it anyway, or am I willing to take the risk that the incentive might be eliminated? It takes two parties to make a deal. We will see whether companies recognize that sort of incentive as having value or whether they discount it. Based on that, states will have to start making decisions about that.
It's not unusual over the history of using incentives in economic development. I think a lot of them have been challenged in the past, so I don't see it as a huge cloud hanging over the process, but it will enter into people's decision-making. Our people are looking at it, but my view is that these incentives are likely to be favorably regarded by the ultimate courts of decision.
Barbour: A major accomplishment of the regular session was the overhaul of our work-force development and job-training programs. We have moved much more toward one-stop shopping. We have given more of the franchise to our community colleges, which have a demonstrated record of success in work-force development. We have merged the federally mandated work-force investment board with the older, state work force boards to go to where we have one board and one agency. We took the former Employment Security Commission and work force development and job training from the Development Authority, put it into the Employment Security Commission and then ended the commission form of governance there and made it a department under the governor. So we now have a Department of Employment Security, which is much more driven by getting the unemployed skills so they can work, and working to get employers involved in the system so we can take federal money that follows the potential employee and get that employee trained to do the jobs that the employers need done. We feel like we have made a big
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| This site in the Lowndes County-Golden Triangle area in Columbus, Miss., was one of a handful of properties in the Tennessee Valley Authority service area certified in 2004 as "mega-sites" for industrial development projects by consulting firm McCallum Sweeney. |
SS: Let's turn to Momentum Mississippi, the long-term, statewide economic development initiative mandated by the Statewide Economic Development Planning Act of 1987. What sorts of recommendations are you looking for from the committee members to include in your 2005 legislative agenda?
Barbour: I expect recommendations about what changes we should make to our incentive programs that are managed by the Mississippi Development Authority for the purpose of job creation. Mississippi was one of the first states in the country, back in the 1930s, to have incentive programs. Historically, the programs were geared to manufacturing. While that is not totally the case today, it is still much more manufacturing-centric in terms of incentives. Today, nationally, a lot of the job opportunities and career tracks in the economy are not in manufacturing. So our Momentum board is about to finish making recommendations on how we should adjust our incentives to recognize that most jobs being created today are not in manufacturing. They are in services, technology, research and development, so that's their first assignment from me. We expect to have a package of recommendations shortly, and we'll make those part of the legislative agenda in January.
The people that elected me more than anything else expect me to help with job creation. We are very focused on that.
SS:Tax incentives are under new scrutiny since the September ruling by three judges on the U.S. Court of Appeals for the 6th Circuit, that Ohio's machinery and equipment investment tax credit is unconstitutional. The ruling calls into question whether many existing or pending investments will be affected. It is not yet clear whether the ruling will stand, but does this episode hurt states' ability to recruit business, or is it a signal that states may simply need to set such incentives aside and concentrate on work-force training or other inducements?
Barbour: We'll see where it ends up. I am confident the Sixth Circuit will rehear the case en banc, and if they come down with a similar decision to what the panel reached, I am confident it will go to the U.S. Supreme Court. So we have a little ways to go there. It's a yellow flag, if not a red flag, particularly for employers. An employer who decided to make an investment in a state, and if part of the incentive is legally questionable, then that's not much incentive. An investor has to make the decision - is this a good enough deal without that incentive to do it anyway, or am I willing to take the risk that the incentive might be eliminated? It takes two parties to make a deal. We will see whether companies recognize that sort of incentive as having value or whether they discount it. Based on that, states will have to start making decisions about that.
It's not unusual over the history of using incentives in economic development. I think a lot of them have been challenged in the past, so I don't see it as a huge cloud hanging over the process, but it will enter into people's decision-making. Our people are looking at it, but my view is that these incentives are likely to be favorably regarded by the ultimate courts of decision.
