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Missouri
Department of Economic Development
Structure
Business Development and TradeTraditional economic development
Community DevelopmentCommunity Development Block GrantsNeighborhood Assistance Tax CreditsHistoric Preservation Tax Credits
Regulatory Agencies
Public Service CommissionProfessional RegistrationDivision of Credit UnionsDivision of FinanceHousing Development
Workforce Development (approximately 470 employees)
General Revenue Industry Training ProgramsCareer Centers/Great HiresWIA & Wagner-PeyserWork Opportunity & Welfare-to-Work Tax CreditsForeign Labor CertificationsFutures/TANF
Tourism
Missouri Arts Council
MISSOURI
Missouri Customized Training Program Department of Economic Development (DED) Department of Elementary and Secondary Education (DESE)
Missouri Community College New Jobs
Training Program (NJTP)
Department of Economic Development (DED) Community Colleges
Missouri Job Retention Training Program (JRTP) Department of Economic Development (DED) Community Colleges
Missouri Community CollegeNew Jobs Training Program
Established 1991 to compliment Missouri Customized Training Program
Provides funding and training for companies creating a substantial number of new jobs
Training funds are generated by the sale of bonds by a community college
Bonds are retired by deferring a portion of the Employer Withholding (2%)
New Jobs Training ProgramHistorical Perspective
The idea of bonds paying for training was an easier sell to a conservative General Assembly
There are several entities involved, such as, DED, community colleges, DOR, OA, bond counsel, trustees
A general policy was enacted requiring a company purchase of bonds to offset fears of default and possible effect on State’s Bond Rating
New Jobs Training Program as Economic Development
The bond program quickly became Missouri’s primary incentive tool
The amount of training funds are determined by number of jobs and wages
Better suited for larger projects/companies
Training is flexible and customized
$16 million appropriation and $55 million cap on debt
Missouri Community College New Jobs Training Program
Overall Active Projects
44 Total active projects/
companies
12,131 Trainees
$870,000 Average award
Overall Active Projects
44 Total active projects/
companies
12,131 Trainees
$870,000 Average award
Fiscal Year 2004 Projects
3* New projects/companies
738* Trainees in new jobs
$19.67 Average wage
* * These figures are down from previous years
New Jobs Training Program
A company’s purchase of a project’s bonds generally ensures:
Working with a more stable company
“Buy-in” by the company and ownership in the project
A commitment to employees
Helps enforce “Clawback Law”
“Clawback Law”
The intent is to retrieve state monies not used in accordance with an agreement
Bond purchases by companies – or at least guaranteed – adds more “Claw” to the Clawback
TWA, Worldcom, Home Savings of America
Eligible industries include manufacturing, R & D, and services involved in
interstate commerce for greater community impact, but excludes retail:
Targeted industries are advanced manufacturing, headquarter
operations, customer service or distribution centers, IT, biotech.
Occupations trained primarily fall into higher skilled, technical positions:
Completes a balance between low skill, entry-level (federal) and multi-
degreed positions (higher-ed)
New Jobs Training Program
Industries & Occupations
Jobs Now Legislation
Budget crisis and slowed economy 2001 – 2003, created additional need
MCTP reduction (incumbent workers)
1999 ranking of 5th to 2004’s poor report
“Jobs Now” legislation passed in 2004
Job Retention Training Program
Structured similar to NJTP bond program
The purpose of the program is to provide training assistance for job retention
Compliments existing programs.
$6 million appropriation and $15 million cap on debt (sold as cost neutral)
Job Retention Training Program
Differences: Training for retained jobs
Eligible industry must have minimum of 100 employees for two years and capital investment of $1 million minimum
Two percent for state administrative costs
One of the following must also apply to be eligible: Substantial investment in new technology requiring upgrade in skills
Located near border state and present risk of relocating from state
Represent a substantial risk of relocation (as determined by DED Director)
Missouri Industry Specific Training Total Statewide Budget
Fiscal Year 2005 $ 27.3 million
Fiscal Year 2004 $ 26.7 million
Fiscal Year 2003 $ 26.5 million
Fiscal Year 2002 $ 35 million
Fiscal Year 2001 $ 38 million
Observations on Bond Issuance Training Programs
Pros:
Ability to generate adequate funding
Easier sell to General Assembly
Participating companies are satisfied
Ownership by companies
State audit…$36 to $1 ROI
Observations on Bond Issuance Training Programs (continued)
Concerns:
Primarily available for large projects and consortium angle is difficult
Administrative, or Non-training costs are costly (approximately 20%)
Some local communities are discouraged by company – purchase practice
Complexity of program (H.R. vs CFO)
Questions?Amy Deem
Department of Economic DevelopmentJefferson City, Missouri
Don RobisonSt. Louis Community College
St. Louis, Missouri [email protected]
