Job creation focus of new state DED director

by Paul Schreiber

SBJ Reporter

pschreiber@sbj.net

The agenda of Kelvin Simmons, the new director of the Missouri Department of Economic Development, is simple: jobs.

Simmons, 41, who became DED director Jan. 1, will be responsible for sparking new job growth through the implementation of Gov. Bob Holden's Jobs Now plan, pending approval of the plan by the General Assembly.

The plan seeks to secure investment in critical infrastructure, stimulate industries like life and plant sciences, and strengthen the state's work force.

Prior to his appointment to the DED directorship, Simmons served as chairman of the Public Service Commission, a member of the Governor's Security Council, director of Equal Employment Opportuni-ty in the Office of Administration, director of constituent services for the late Gov. Mel Carnahan and as a Kansas City councilman.

Simmons' predecessor at the DED was Joe Driskill, who held the position of director for 10 years, resigning in December to become executive director of the Missouri Technology Corporation.

Jobs Now

In Holden's Jan. 21 State of the State Address, he said jobs were the state's "single most important priority."

Holden proposed that his Jobs Now plan would be funded by repealing three tax-credit programs: research and development, transportation and development, and business facilities, Simmons said.

"(Revenues) from these would provide $12 million to $15 million a year that could be used to underwrite between $150 million to $200 million in bonds, issued by the Missouri Finance Board," he said. This money is then bonded over a 10-year period, "creating a jobs fund, and this is cost neutral. It will not cost the state any appropriations."

Bonds sold through the MFB create the jobs fund, Simmons said. "And then what happens is communities, cities and municipalities will be able to apply for grants and loans to complete their infrastructure projects, and that money is upfront cash rather than in the form of tax credits," Simmons said.

"Sixty percent of the program will be used for infrastructure-related projects for municipalities, communities (and) cities across the state of Missouri. Another 20 percent will be used for the creation of life-science districts. And the last 20 percent will be created for infrastructure related to federal matching dollars," Simmons said.

Visiting business, educational and community leaders around the state will be one of Simmons' first-year goals.

New job bonanza?

The plan should create thousands of front-end and back-end jobs, Simmons said. Up front would be construction, architectural and engineering jobs to install infrastructure like water and sewer facilities, roads, bridges, rail spurs, airports, university labs, and high-speed and broadband technologies, he added.

Following these infrastructure additions would be jobs associated with whatever businesses utilize the services, Simmons added.

"For every $1 million committed for new water supply and sewer facilities, the return on investment is $19 million," Simmons said. "Likewise, new roads and other public infrastructure projects produce $17 million to $18 million for each $1 million of investment."

Attracting new businesses

While the biggest budget cuts the DED has experienced are in business services, including general revenue-funded business retention and attraction programs, Simmons said Missouri will continue to use tax credits and tax increment financing, as well as state and local grants to attract new businesses.

Two Missouri cities should see employment boosts in early 2004, Simmons said. "The IRS will be consolidating its efforts and bring more than 2,500 new jobs to Kansas City from Kansas."

In Joplin, Systems and Services Technology, an automobile loan processor, will add about 500 jobs, Simmons said. SST, with headquarters in St. Joseph, is a subsidiary of JPMorgan Chase Bank.

In December, Driskill reported that economic conditions in the state were improving. Between January and October 2003, while the nation lost 220,000 jobs, Missouri employment rose by 18,000 and the state ranked in the top third of the nation in job growth during 2003.

Retaining existing businesses

The labor climate and lower costs for old-line manufacturing in some foreign countries is appealing for certain Missouri businesses, Simmons said. And once the business sets up operations there, it's very difficult to get them back, he added.

Offsetting job and revenue loss due to companies exiting Missouri is the need to plan for the future, Simmons said. Stimulating development in health and agricultural sciences, enhancing manufacturing capabilities and beefing up communication capabilities, such as broadband technology, should be central concerns, he added. "We have to get into an information-age economy in the state of Missouri."

Departmental efficiencies

The DED has about 1,600 employees spread out among 30 divisions and departments, according to Simmons. Consolida-tion has been necessary due to budget cuts, he said, adding that "in the last two years we have reduced size by 50 percent in full-time employees, and also 50 percent of our general revenue has been reduced."

For 2004, Simmons said the DED will be "working with anywhere between $248 million and about $278 million. We have not received a budget from the governor at this point, so until that is received, that's when we start working based on his recommendation.