PeoriaStory

Peoria's economic development: needs help?

PEORIA -- Below is a news release from the TriCounty Regional Planning Commission about  future plans for economic development, and a list of the movers and shakers who have agreed to work for it.

My reaction:  apparently a 'palace coup '( in the words of the PJS business reporter Steve Tarter) took place a few days ago to generate this new organization.  Fascinating. Will it work?  Dunno. At least they're using the Illinois Open Meetings Act, a plus. Check out my comments on this PJS story on the topic.

FOR IMMEDIATE RELEASE

Contact Terry Kohlbuss, Executive Director of TCRPC at 673-9330

Mapping Tomorrow’s Economic Development

PEORIA – (August 3, 2012) What’s different with this regional economic plan? 

The first Regional Strategy Policy Steering Committee meeting is set for 8 a.m. Thursday, Aug. 9 at the Workforce Network, 211 Fulton St., Suite 300. The meeting is open to the public. All meetings of this committee will operate under parameters of the Illinois Open Meetings Act. 

During the meeting, expected to last about 90 minutes, participants will begin by understanding their role in governing and driving the economic development initiatives in the four-county region that includes Peoria, Tazewell, Woodford and Mason counties. They will learn about asset-based Community Economic Development (CED) plans. The group will determine the priorities, assign action teams, work plan/timeline and accountabilities for results. Media interviews / availability will be granted after the meeting. 

“This is a blue ribbon panel that will lead us on this economic development journey,” said Regional Strategy Policy Steering Committee Chairman Jim Baumgartner. “These leaders represent public and private sector interests in four counties within the Economic Development District and are committed to drafting a plan that includes meaningful involvement, disciplined processes, clear strategies and consistent measurement.” 

The first Strategy phase, set to last 12-14 months, will evaluate and prioritize how the region approaches economic development. The “Foundation Milestone” – one of four major milestones throughout the process – will be completed by Oct. 1. It will identify the region’s assets and develop measurable county-level and regional-level strategies and an action plan.

The planning effort officially launched on July 26^th with a meeting attended by more than 200 leaders from business, community, government and not-for-profits.

The regional economic development plan is a grass-roots initiative. Tri-County Regional Planning Commission (TCRPC) is funding ViTAL Economy, a Maryland-based consulting firm, to organize the regional economic development plan. The Regional Strategy Steering Committee, which will lead the process, consists of 28 area individuals and is being led by Jim Baumgartner, Caterpillar Inc.’s Director of Corporate Public Affairs. Working Groups also are being created to oversee implementation.

Regional Strategy Policy Steering Committee

Chairman: Jim Baumgartner – Caterpillar, Inc.

Debbie Simon- President and CEO Methodist Medical Center of IL

Rita Kress – CEO Kress Corporation

Don Welch – CEO Peoria Area Convention and Visitors Bureau

Chuck Weaver – Entrepreneur/ Peoria City Council

Eric Turner – Peoria City Council

Jim Montelongo – CEO Engineering People/ Former Peoria City Council

Diana Hall – President/ Owner Bard Optical

Mike Phelan – Tri-County Regional Planning Commission, Peoria County Board, Township

Patrick Urich – Peoria City Administrator

Steve Morris – Peoria County Board/ small business

Dan Daly –President Busey Bank

Mike Everett – West Central Illinois Building and Construction Trades

Russ Crawford – Tri-County Regional Planning Commission/ Tazewell County Board

Dean Grimm – Tri-County Regional Planning Commission/ Tazewell County Board

Norm Durflinger – Morton Mayor/ retired public educator

Doug Parsons –  CEO Excel Foundry

Gordon Honegger – CEO Morton Community Bank

John Erwin – President Illinois Central College

Larry Whitaker – Chairman, TCRPC/ Woodford County Board

Mike Hinrichsen – Tri-County Regional Planning Commission/ Woodford County Board

Bob Parsons – CEO Parsons Engineering

James Griffin – Mason County Board Chairman

Jehan Gordon, State Representative 92^nd District

Mike Unes, State Representative 91^st District

Colleen Callahan – U.S. Department of Agriculture

Bola Delano – Illinois Department of Transportation

Don Forrest – Workforce Development Board President

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Economic subsidies: the big con

PEORIA -- One of my pet peeves is corporate welfare, that is,  tax subsidies to profitable corporations.  It's disgusting. There should be federal laws banning the practice.

Here's a fascinating report on the practice from the Illinois Public Interest Research Group:

 

December 14, 2011--States are spending billions of dollars per year on corporate tax credits, cash grants and other economic development subsidies that often require little if any job creation and lack wage and benefit standards covering workers at subsidized companies. These are the key findings of Money for Something: Job Creation and Job Quality Standards in State Economic Development Subsidy Programs, a 51-state “report card” study published today by Good Jobs First, a non-profit, non-partisan research center based in Washington, DC. It is available at www.goodjobsfirst.org

.

The new national report was released the same week Illinois lawmakers, under pressure from Sears and CME, expanded the state’s EDGE Tax Credits program as part of a tax break package.

 

“Illinois’ primary tool to promote economic development and retain businesses falls far short in ensuring the jobs created are meaningful,” said Brian Imus, Illinois PIRG state Director. “Rather than expand the inadequate program, the new study shows Illinois lawmakers should focus on strengthening public interest protections for tax break programs, like requiring jobs generated have market-based wage standards.”

 

“With unemployment still so high, taxpayers have a right to expect that economic development investments create significant numbers of quality jobs,” said Good Jobs First Executive Director Greg LeRoy. “The days of ‘no strings attached’ are largely gone, but the fine print in many states is still full of gaps and loopholes.”

 

Nevada, North Carolina and Vermont were found to do the best job in applying job standards to their major subsidy programs. The District of Columbia, Alaska and Wyoming rated worst. Illinois ranked 38.

 

“If subsidies do not result in real public benefits, they are no better than corporate giveaways,” said Good Jobs First Research Director Philip Mattera, principal author of the report. “States should be using these programs to reduce unemployment and raise living standards, not simply to increase corporate profits.”

 

Money for Something rates the performance standards and job quality requirements of 238 key subsidy programs from the 50 states and the District of Columbia that together cost more than $11 billion a year. Each program is rated on a scale of 0 to 100 (with extra credit for advanced features).  The scores for the programs in each state are averaged to derive a state score. The report’s key findings are as follows:

 

• Nearly all the programs (222 of 238) have some kind of quantifiable performance requirement, but only 135 relate to job creation, job retention or training of a certain number of workers. Those programs without a job-related requirement cost taxpayers more than
  $7 billion per year.
  
  
• Many programs promote job security and prevent shell games: 98 of the programs with job-related standards require that new jobs remain in existence for a minimum period and/or that a subsidized facility remain open for a designated period, and 92 bar companies from counting existing jobs that are simply moved from another facility.

 

• Fewer than half (98) of the 238 programs impose a wage requirement, and only 53 of those are tied to labor market rates—a more effective benchmark than stagnant fixed amounts. Only 11 of the wage requirements raise wage levels by mandating rates that are somewhat above existing market averages for the geographic area or industry sector.
  
  
• Wage requirements vary enormously—from just above the federal minimum to more than $40 an hour in certain cases for a handful of programs.

 

• Only 51 programs require that a subsidized employer make available healthcare coverage of some kind, and only 31 of these require that the employer contribute to premium costs.

 

• The states with the best average scores are: Nevada (82), North Carolina (79) and Vermont (77). The worst are: the District of Columbia (4), Alaska (5) and Wyoming (10). Twenty-three states score above 40, the average for all states. See below for a table with all state scores and ranks.
  
  
• There is greater variation in the scores by program, with 12 scoring 100 or above (due to extra credit) and 13 getting a zero. 
  
  
• While nearly every state has more than one program with job-creation and/or job quality standards, some states are erratic: 13 have divergences of more than 80 points among programs.  States build in strong safeguards but often fail to do so uniformly.
  
  
• State economic development policies typically evolve over many years, so current administrations do not deserve all the credit or blame.

The report offers these policy recommendations:

 

• Every subsidy should contain job creation, job retention or training requirements. Those should be strengthened by provisions barring employers from shifting existing jobs from other facilities and mandating that the jobs be kept in place for a minimum period.
  
  
• Every job or training position in a subsidized facility should be covered by a wage standard, preferably tied to labor market averages and structured in a way that raises pay above market levels. They should also offer health coverage in which the employer contributes to the cost of the premium. These rules should also apply to part-time, temporary and contract workers. 

• Decent job standards do not guarantee that a program’s benefits will outweigh its costs. Sometimes the only sensible course of action is to eliminate a program altogether.

 

Note: Standards such as those rated here mean little if they are not enforced. In a companion report to be issued soon, Good Jobs First will grade the states on their enforcement practices.

 

 

 

______________________

 

Brian Imus, Director

Illinois PIRG

328 S. Jefferson, Suite 620

Chicago, IL 60661

312-544-4433 x 210

cell: 312-399-3834

www.illinoispirg.org

 

Here's real economic development for Illinois

PEORIA -- Here's a provocative idea for real economic development in downstate Illinois, courtesy of Ken Meter of Crossroads Resource Center. 

Ken Meter’s PowerPoint file is available here.

 

As you know, agriculture is big in Illinois.   Forty percent of the state's farmland is located within the 32-county central Illinois region that Ken Meter studied, and the 1st, 2nd, and 3rd ranked counties for sales of farm products are located in central Illinois--Iroquois, McLean, and Livingston.  

Central IL farmers and ranchers sell $4.8 billion of food commodities per year.  (average figure from 1987-2009)

But they spend 4.3 billion on inputs to raise those commodities.

Thus, there is an average gain of only $464 million per year. 

This is the total gain for the 26,537 farms in central IL-- meaning an average of only $16,000 a year per farm.

In 2009 dollars, Central Illinois farmers actually earned $115 million dollars less by selling farm products in 2009 than they earned in 1969.

Meanwhile, on the consumer side, Central IL consumers spend $3.9 billion per year buying food, nearly all of which comes from outside our area. 

If you add the amount of food dollars leaving central IL ($3.9 billion) and the farm input dollars leaving central IL ($4.3 billion), there is a gigantic sucking sound of over 8 billion dollars leaving our communities each year because of our current food and farm economy.  

Local food production and consumption will create and retain wealth in our communities.

If only 15% of food were purchased from local farmers, it would generate $639 million in new farm income, which would cycle within our communities each year.

Here are some of the local food production and consumption trends revealed in the USDA data that Ken analyzes:

Increasing number of small farms--of Central Illinois’ 26,537 farms, 9,451 (36%) are less than 50 acres

Increasing amount of non commodity farm products (generally fruits, vegetables, meats and eggs) grown – 408 farms worked about 20,000 acres (total) to produce vegetables, which is a 78% increase in the number of farms producing vegetables over 2002

Increasing amount of non-commodity products sold through direct sales by farmers to other members of our community – thus retaining wealth and promoting self-sufficiency.   972 farms sell at least $5.9 million directly to consumers.  Compared to 2002, this is a 28% increase in the number of farms selling direct, and a 74% increase in the dollar amount of direct sales. 

• 600 farms produce and sell value-added products

• 78% increase in the number of farms raising veggies in central IL, and a 74% increase in direct sales. 

• 2,818 farms sold $26 million of food directly to consumers – 41% increase in dollar amount over 2002

The USDA ERS tabulates data for Illinois’ top farm product.  Corn, soybeans, and hogs are the top 3 – followed by cattle, ornamentals, dairy, wheat, eggs, and hay.  But if “direct sales” were considered a farm product they would slot in at #10, with 26 million, just after hay, and just before apples.

Over 17,000 acres in the region are certified organic, and 8,904 acres under conversion 

 Woodford County  (total population around 30,000, but with a high concentration of organic farms)  leads the region in direct sales ($650,000 which was a 78% increase over 2002)  AND Woodford was called out by the Robert Wood Johnson study as the 3^rd healthiest in IL --  See my analysis of why Woodford is as healthy as the rich collar counties of Chicago here: http://civileats.com/2010/02/25/rural-living-may-be-hazardous-to-your-health/   Could be a model for other counties, and for the state – improving economic and personal and community health all at the same time.

Also SEE:  Dave Swenson.  “Selected Measures of the Economic Values of Increased Fruit and Vegetable Production and Consumption in the Upper Midwest.” Department of Economics and the Leopold Center for Sustainable Agriculture, Iowa State University, March 2010, p. 16. (http://www.leopold.iastate.edu/research/marketing_files/Midwest_032910.pdf)

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