Missouri

Department of Economic Development Structure Business Development and Trade Traditional economic development Community Development Community Development Block Grants Neighborhood Assistance Tax Credits Historic Preservation Tax Credits Regulatory Agencies Public Service Commission Professional Registration Division of Credit Unions Division of Finance Housing Development Workforce Development ( approximately 470 employees) General Revenue Industry Training Programs Career Centers/Great Hires WIA & Wagner-Peyser Work Opportunity & Welfare-to-Work Tax Credits Foreign Labor Certifications Futures/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 College New 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 Program Historical 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 * * T hese 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 5 th 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 Development Jefferson City, Missouri Don Robison St. Louis Community College St. Louis, Missouri