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Budget cutbacks inevitably result in program cutbacks, says MDA chief

Reality bites…for some MDA programs

When the Mississippi Development Authority (MDA) pulled funding for a product showroom in Atlanta, the state economic development agency received criticism from exhibitors and others in the business community.

MDA executive director J.C. Burns was quick to point out that the action wasn’t intended to hurt small businesses. It was simply the result of a tough business decision.

“As we’ve gone through the budget process, MDA, like all state agencies, has seen its funds reduced,” Burns said. “In a cost-cutting measure, we had two programs to consider and weighed several factors before we made the determination to withdraw from the product showroom in Atlanta. We had an out-of-state program that cost $100,000 a year for a three-year, nonnegotiable commitment and would help a maximum of 22 people. Then we had an in-state program that cost $70,000 a year on a per-year basis and would help 144 vendors.”

Since 1998, the MDA has managed and partly funded a 2,000-square-foot pavilion in a permanent showroom at the Atlanta Gift Mart for four shows a year — in January, March, July and September — attended by 100,000 or so buyers from around the world. The MDA spent a total of $300,000 for the three-year contract and up to 22 vendors paid about $60,000 in leasing fees. This year, only 19 vendors participated, Burns said.

“The original concept was that it would become a self-sufficient program and that it would not need to be funded by MDA over a sustained period of time,” Burns said. “But that hasn’t been the case.”

Burns said he began studying the programs last year because they were so similar. The current lease in the Atlanta Gift Mart ends in November.

“The three-year commitment with the Atlanta Gift Mart was due to be signed this year and we would have been contractually bound no matter what,” he said. “At this point, we don’t have a crystal ball to see if the economy is going to improve this year, or next year, or the year after. So it didn’t appear prudent to go into a three-year obligation, spending Mississippi taxpayers’ money in another state. We have to make the most of every dollar we spend.”

Held in Jackson every June, Mississippi Market is a wholesale show open exclusively to Mississippi companies — manufacturers, professional craftsmen, wholesalers and service providers — to exhibit their products and services to buyers that represent more than 30,000 retails stores throughout the Southeast. Last summer, 117 Mississippi companies participated.

When the Mississippi Legislature passed out new fiscal budgets for state agencies, MDA received a 11.6% budget cut and was told to plan for an additional 5% budget cut, said Sherry Vance, MDA spokesperson.

“After the decision not to renew was made, each of the 19 vendors affected were notified and information was given to them about participating in programs such as the Mississippi Market and other trade opportunities,” Vance said.

Aubrey Patterson, chairman of Tupelo-based BancorpSouth, insisted the decision not to renew wasn’t politically motivated, as several people suggested.

“J.C. (Burns) has used the best talent at MDA without regard to prior political affiliation,” Patterson said. “Professional economic developers are being given the support and direction from him to continue a successful effort. I’ve been much in admiration for the approach he’s taken.”

Patterson said Burns has juggled budget cuts and available resources, while continuing to help existing business and industry with other programs and services through MDA.

“MDA has limited and lesser resources and J.C. (Burns) is spreading them as far as he can make them go by requiring more participation from local government entities and by putting money where there is the most benefit for the dollar spent,” he said. “From observing recruitment and project development efforts firsthand, that’s exactly what is happening. I’ve seen that from both sides of the fence — from looking over his shoulder and looking across the table at him. His staff bases criteria as they would if they were running their own business.”

MDA’s existing business and industry division provides programs on how to start a business, industry assistance, buyer/supplier cross-match data, resume cross-match service, minority programs, expansion and relocation tools, incentives and financial assistance programs. The Mississippi Business Finance Corporation (MBFC) administers various finance programs designed to assist businesses in locating or expanding in the state through credit or interest rate enhancement and incentive programs.

“All of these programs are related to timing, and what’s being created in the form of investment and jobs,” Burns said. “If a company came to Mississippi in 1952, different programs and incentives were in place than, say, in 1965, and so on. I don’t think there’s any unfairness to the system, when you look at it from the standpoint that companies get what’s available at the time they make the decision to come to Mississippi.”

Burns said decisions are made based on getting the job done, being fair and equitable to everyone and being good stewards of the taxpayers’ money.

“Those are the principles — the balance of all three — that guide us in the decisions that we make,” he said.

Contact MBJ contributing writer Lynne Wilbanks Jeter at lwjeter@yahoo.com or (601) 853-3967.


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