Elected officials need to have a greater quantitative and fundamental understanding of complex tax incentives to govern economic development work. This comes after the consideration of the County Ad Hoc Economic Development Growth Engine (EDGE) committee recommendations were deferred in Shelby County Commission Economic Development committee. The ad hoc committee is represented with a majority of private sector representatives along with publicly elected Shelby County Commissioners. The deferral was based on concerns raised by Commissioner Eddie Jones who did not serve on the ad hoc committee.

Jones concerns have to do with payment-in-lieu of taxes (PILOT) renewals for existing corporate operations. Mathematically, PILOT renewals have  the same tax revenue impact as abating taxes for any existing company. This type of PILOT is known as a retention PILOT used for the purpose of retaining company operations in Shelby County while also locking in long term leases for commercial real estate interests.

This concern and deferral should not take away from the positive work of the ad hoc committee as led by Commissioner Willie Brooks and heralded by Commissioner Mark Billingsley. But rather, the deferral should serve as an opportunity for publicly elected officials to check and improve upon the work of the majority private sector represented ad hoc committee.

As they are paid to do, private sector representatives often view community and economic development through the lens of their private enterprises. Given this view, private sector recommendations need added balance and proper checking by informed elected officials to best serve customer taxpayers and the ENTIRE business community.

Better Understanding Needed

Confusion arose in the County Commission Economic Development committee on Wednesday over the approval process of payment-in-lieu of taxes (PILOT) tax abatements. Unlike tax increment financing (TIF), EDGE PILOTs and for that matter other economic development agency PILOTs do not require local legislative approval. Local economic development agencies have tax abating authority for PILOTs without local legislative approval.

Further, there are a range of different PILOT types that require different analysis. It’s not clear from local proceedings that legislators are effectively evaluating the complexities and impact of PILOTs on local tax revenue. And without training, legislators may never develop the needed evaluative ability.

For example, accounting for PILOTs for existing companies against existing taxes/jobs (retention PILOTs) requires a different quantitative analysis than does a new corporate recruitment/new job PILOT. Without a fundamental understanding of these nuances, elected officials cannot make informed decisions about taxpayer funded economic development policy.

Adding to the confusion, Memphis Tomorrow and The EDGE Board have not helped the matter with the EDGE Scorecard which fails to properly account for excessive retention PILOT incentives. Incentives, that when properly accounted for, are taxpayer losses and not gains as claimed on the EDGE Scorecard. Proper accounting for retention PILOTs can be seen in this video while the case is also made for a new EDGE Board.

Legislative Opportunity

While leveraging the good work of the County EDGE Ad Hoc committee and listening to the people, local legislators should seize this opportunity to learn about, speak to and develop a command of economic development policy and incentives. The last County Commission often complained about the Mayors having too much control of the economic development process. Given these Administrative concerns, legislators should give voice to economic development policy while developing a deeper understanding of tax incentives as they prepare to evaluate 9 other abating agencies per ad hoc recommendations.

A variety of final recommendation improvement opportunities exist which can be addressed through legislative amendment. Some of these opportunities are as follows: 1) new EDGE Board, 2) establish community investment benefit/cost ratio to serve as a hurdle ratio to future PILOT awards 3) formally define “economic development” to facilitate effective measurement 4) dump the EDGE Scorecard in favor of more accurate tax revenue projection measurement 5) end retention PILOTs for existing company operations 6) End residential PILOTs or at least allow the taxpayer to breakeven through the establishment of a community investment benefit/cost ratio 7) establish time frames for ordered reviews in the recommendations 8) seek legal opinion on the most expeditious path to curtail economic development agency abatement authority in the event of an emergency to clearly define legislative power over abatements and most importantly  9) after a 4 year hiatus, get started immediately with connected workforce development.

Conclusion

Since economic development impacts everything, legislators should take full advantage to develop an increased acumen for balanced economic development policy. Getting there, will perhaps involve training or even asking, what legislators may mistakenly think are “stupid” questions. Such legislative learning will support more informed oversight while better serving customer taxpayers and economic development outcomes.

The County EDGE Ad Hoc committee final recommendations represent positive movement but can be further improved through Commission amendment. The Shelby County Commission Economic Development Committee will be considering the recommendations of the Commission Economic Development Growth Engine (EDGE) Ad Hoc committee on Wednesday November 28, 2018.

The resulting recommendations are designed to improve Memphis/Shelby economic development outcomes through EDGE reforms and improved coordination between EDGE, The Greater Memphis Chamber (GMC) and countywide economic development organizations. The recommendations come after 9 meetings under the leadership of Commissioner Willie Brooks, participating Commission members and representatives from the private sector.

The work of the committee was most significant in revealing fundamental improvement opportunities to include more effective measurement, workforce development, pad ready site readiness/development, road completion, processes review and support for existing local business. The former has been kicked aside over the last 7 years by local economic development leaders as excessive corporate/real estate incentives and financial engineering have been, unfortunately, locally prioritized.

Progress on Reform

Economic development reform progress is evident in the recommendations. EDGE Ad Hoc Committee recommendations clearly define EDGE and Greater Memphis Chamber (GMC) roles while stating the need for  measurable goals, better public reporting processes and funding for EDGE and GMC. Reviews were ordered for incentives, fees, the legality of the use of code names to protect prospect anonymity and the 9 other Shelby County payment-in-lieu of taxes (PILOT) programs.

Further, given County funding authority over K-12 and oversight of the Workforce Investment Network (WIN), it is recommended that Mayor Lee Harris and the County take the lead on workforce development.

And finally, recommendations call for plan development for commercial/industrial site availability, support for local business, countywide economic development coordination and a review of the EDGE Board and CEO reporting structure.

Amendments for Improvement

The Shelby County Commission should speak more specifically by amending the County EDGE Ad Hoc Committee recommendations for improvement as shown below:

New EDGE Board – A new EDGE Board is needed after resulting below peer average wage growth and administering deficient workforce development efforts, a lack of a strategy for site readiness, incomplete accounting that resulted in taxpayer losing excessive retention PILOTs, declining small business vitality and most recently, at the last meeting, an excessive taxpayer losing expansion PILOT.

Establish Community Investment Benefit/Cost Ratio – EDGE currently uses a 1.0 benefit/cost ratio to determine breakeven for the taxpayer which is defined by dividing projected tax proceeds by the amount of the abatement. A 1.0 benefit/cost ratio results when projected tax proceeds equals the amount of the abatement. The problem with the 1.0 benefit/cost ratio is that it does not consider the economic impact of investing in the community. In this way, the establishment of a community investment benefit/cost ratio would better inform breakeven for the taxpayer and smarter incentives in support of local business retention/growth and infrastructure to facilitate economic development attraction.

Define Economic Development – Public bodies should formally define what “economic development” is. Without definition, measurement cannot be established. “Improving the social well being of the community’s people” has been publicly advocated for in local public proceedings. Such a definition would effectively identify the taxpayer as the customer in local economic development work. Thinking in terms of the Amazon Road Map of The Memphis Economy of the University of Memphis would perhaps help in speaking to a definition for “economic development”.

Dump the EDGE Scorecard – Dump the bogus EDGE Scorecard for measurement.

End Retention PILOTs– If fully accounted for, it will be revealed that abating taxes for existing businesses/jobs is a loser for the taxpayer when applying a minimum benefit/cost ratio for community investment. Given the significant disruption and cost of relocation, corporate retention is supported not by tax abatements but by smart community investments in workforce, public safety, pad ready sites, roads, public transit, and small business.

Workforce Development – GET GOING TODAY with accessible tools and ready to go local small business solutions.

Establish Time Frames – There are several reviews ordered in the recommendations that lack a time frame. Given the lack of local sense or urgency, without a time frame, local review work could stretch into a year or more.

The adoption of the above amendments will improve the final product of the EDGE Ad Hoc Committee for the benefit of the customer taxpayer.

Conclusion

The County EDGE Ad Hoc committee work has been most productive in publicly revealing areas for needed improvement in the work of economic development. The work demands a plan which will require defining economic development, effectively and publicly measuring progress against that definition and course correcting as needed. In the current environment, course correction starts with a new EDGE Board. If the former occurs, local economic development efforts can only improve.

About This Site –  Memphis Corporate Community Leadership (MCCL) Measured

With a special focus on Memphis Tomorrow, MCCL Measured is the first ever and exclusive tool to attempt to measure the effectiveness of Memphis Corporate Community Leadership efforts that use taxpayer money. The site is designed to facilitate financial literacy education regarding taxpayer funded initiatives. Additional videos and resources can be found by browsing the entire site or at http://mcclmeasured.net/resources . Please email questions to jkent@pathtrek.net

What is the economic impact of investing tax dollars in the community as opposed to warehouse jobs ? The EDGE Board doesn’t seem to care. The above question comes and is answered in this article in response to Councilman Martavius Jones concerns regarding excessive tax abatements approved by the Economic Development Growth Engine (EDGE) Board as covered in the Memphis Business Journal. Jones is one of the the few local legislators that has professionally resided outside of Memphis. This gives Jones unique insight to ask questions that things are not adding up in Memphis when compared to other cities.

The first question that should be asked is “Is there a need to incentivize 30 warehousing jobs at all?” Probably not. But if so, some boundaries need to be set for abating EXISTING commercial property taxes for NEW jobs. Based on the analysis in this article, the EDGE Board left an estimated $850K, at a minimum on the table, at its most recent meeting based on the application of a minimum and proven community investment 1.24 benefit/cost ratio. And if the most recent study of the Economic Institute regarding warehousing jobs was applied, the $850K left on the table would jump to $1.35M.

The objective of this article is to encourage the establishment of a benefit/cost ratio to inform smart and balanced economic development investments that support the implementation of the Amazon Road Map published by The Memphis Economy of The University of Memphis. The analysis in this article is for a new job expansion PILOTs while abating EXISTING taxes. Retention PILOTs, which abate existing taxes against existing jobs while requiring a different analysis,  should be ended altogether. 

Decline by Design

Community disinvestment continues in Memphis within a unique municipal decline by design framework which Jones questions. Last Wednesday, the EDGE Board called a special meeting to stick it to the taxpayer by voting to abate EXISTING local tax dollars for 30 brewing company warehouse jobs. This vote comes on the heels of local concerns regarding EDGE and economic development policy. In short, the Board vote supports the argument for a new EDGE Board that follows below peer average total wage growth, neglected workforce development efforts, tanking small business vitality and a lack of site availability.

The tax abatement, otherwise known as a payment-in-lieu of taxes (PILOT), appears to be more of a real estate than an economic development deal. PILOT acceptance results in a paying tenant for the warehouse owner. The $2.3M abatement yields projected tax proceeds of $1.8M resulting in a $500K loss for Memphis/Shelby taxpayers and a .79 benefit/cost ratio according to the EDGE PILOT Project Summary. This project summary does not apply the more rigorous requirements found in the Economic Institute study previously mentioned or the analysis that results in a 1.24 benefit/cost ratio found in this article.

The benefit/cost ratio is derived by dividing the projected tax proceeds by the taxpayer funded abatement. A 1.0 benefit/cost ratio implies that the taxpayer is benefitting the same as the recipient of the taxpayer funded PILOT. But is this really the case? No one has yet to ask,  “What is the economic impact or benefit/cost ratio of investing in the community?”. Such information would better inform smarter economic investments for community benefit.

Economic Impact of Community Investment ?

This discussion in this section is not designed to be right per se but to discourage community disinvestment and the establishment of a community investment benefit/cost ratio to inform smart economic development incentive policy with regard to abating EXISTING taxes for NEW Jobs.

Investing in the community should not have a 1.0 benefit/cost ratio but a higher ratio if local government is using taxpayer funds to improve its community. Close review of the PILOT project summary reveals a $200K per year abatement of existing property taxes over a 10 year term is used to support the .79 economic impact benefit/cost ratio. So what is the benefit/cost ratio of investing in the community ?

Both increased school counseling services and more police for safer streets have been stated as local needs to improve economic development outcomes for a more prepared workforce and safer streets. So, to derive a economic impact benefit/cost ratio for community investment, increased school counseling and police will be used.

Using available public data sources, a $50K police officer can be shown to increase tax proceeds $55K+ per year based on increased property values due to decreasing violent crime. And this analysis argues that a $50K school counselor with a caseload of 100 will increase total student wages by $500K per year with a 2.3 economic multiplier applied to increased wages. The 2.3 factor serves as an approximate average economic impact multiplier across the local economy for investments in education. A 3.76% local tax income rate is used against increased wages based on the rate derived from page 2 of the EDGE Project Summary.

And $776,000 of commercial property tax proceeds or 26K per worker in PILOT commercial property tax income is accounted for in this analysis by redistributing those proceeds across the working student population at a 10% rate to account for increased commercial demand for investments in education and resulting higher wages. This results on an annual basis to be $26,000 per 100 students or $260 per student based on the following calculation ($26,000 / 10 yr term) x 10% = $260. Given these assumptions, the following calculations are derived:

The result of this analysis is a 1.24 benefit/cost ratio. With the further use of multipliers against commercial property the ratio can jump to a 1.58 benefit/cost ratio. Again the purpose this section is not to be right but to encourage a quantitative context to the conversation and the establishment of a benefit/cost ratio for community investment while informing smart economic development incentives for workforce development, public transit, small business development, pad ready site development and recruitment. The analysis models economic benefits of community investment that result in increased property values, commercial demand and wages.

Conclusion

Typically this blog supports new job PILOTs but not this PILOT. To achieve a 1.24 benefit/cost ratio, the EDGE Board would have needed to reduce the incentive from $2,325,744 to $1,474,016 which represents approximately $850K or 37% in excess abatement. This does not apply the more rigorous standards of the Economic Institute study for warehousing jobs which would have resulted in a $1.35M reduction.

In practice, per Martavius Jones concerns in the MBJ of providing everyone a 75% abatement, a more restrained 47% abatement would have worked for both the taxpayer and this real estate deal labeled “economic development”. But instead, the EDGE Board robotically plowed forward with a 75% taxpayer losing abatement for warehousing jobs.

Get real folks. Boundaries are needed in the abatement of existing taxes while ending retention PILOTs. A new EDGE Board is needed. The disconnected EDGE Board continues offering taxpayer losing and excessive incentives, without restraint, in the face of growing local concerns……

About This Site –  Memphis Corporate Community Leadership (MCCL) Measured

With a special focus on Memphis Tomorrow, MCCL Measured is the first ever and exclusive tool to attempt to measure the effectiveness of Memphis Corporate Community Leadership efforts that use taxpayer money. The site is designed to facilitate financial literacy education regarding taxpayer funded initiatives. Additional videos and resources can be found by browsing the entire site or at http://mcclmeasured.net/resources . Please email questions to jkent@pathtrek.net

In reference to a recent Memphis Business Journal article, Richard Smith is only a small part in the disruption of the Memphis economic development ecosystem. Routinely dismissed by the non-investigative local press and the establishment of which Smith is part is the army of customer taxpayers supporting the disruption of the economic development system. The taxpayers are represented by bloggers, social media and activist organizations such as Memphis Raise Your Expectations (MRYE). These are customer taxpayers who have been proposing research based economic development solutions to the dismissive and arrogant Memphis Corporate Community Leadership (MCCL) complex for some time now.

But the same family merry go round of establishment figures get the credit for needed disruption. Disruptive solutions to local economic development efforts start in Memphis with a largely new Economic Development Growth Engine (EDGE) Board and listening to different people outside of the establishment. Most on the EDGE Board have been serving for almost seven years while overseeing deficient economic development efforts. New ideas and non-establishment figures are needed to serve on the EDGE Board to drive more balanced economic development efforts to serve customer taxpayers. The problem with the disconnected MCCL establishment is that they seem to lack an understanding of what “economic development” is or who the customer is in taxpayer funded initiatives.

EDGE Board Meeting

At the most recent EDGE Board meeting, Board resignation was requested in public comment. Johnny Moore, a banker, EDGE and Memphis Tomorrow Board member, asked the public commentator, Joe B. Kent, for data to support his request. Kent reeled off 1) below peer average total wage growth since EDGE began, 2) EDGE botched workforce development efforts and 3) bogus retention PILOT accounting that abates taxes against current tax revenue that comes at an estimated taxpayer loss of $250M+ while being reported as a $600M gain. Kent failed to mention a lack of site availability to support economic development efforts.

Mark Halperin, EDGE Board member and Moore cited their volunteerism as accomplishments implying “self-sacrifice” without responding to Kent’s data supported concerns. If it were not true, it seems, Moore, a banker, would quickly defend against the bogus accounting assertion made by Kent but that didn’t happen. Bogus PILOT accounting has been used to justify excessive tax abatements that have undermined true economic development efforts in site readiness, workforce and small business development. Concerns over excessive incentives were additionally raised by EDGE non-voting board member and City Councilman Martavius Jones.

Given local EDGE results, perhaps Moore and Halperin should go volunteer somewhere else. Halperin was key to the important ServiceMaster win but has served on the EDGE Board for 7 years. There are plenty of volunteer opportunities in Memphis available other than their “self-sacrificing” EDGE Board volunteerism. And if Moore really wants to help, perhaps he can volunteer to ask his Memphis Tomorrow CEO organization to shut down, fulfill their promises and restore Memphis to average status with a $1.5 billion contribution to City and County Government by the end of the year. The $1.5B ask is supported based on an estimated $124 recurring annual Memphis / Shelby taxpayer loss that have come as a result of deficient performance from the Memphis Tomorrow taxpayer funded Fast Forward initiative. The Memphis ecosystem has declined ever since the founding of Memphis Tomorrow.

But for some reason, even given the results, a new EDGE Board is never considered by the Memphis/Shelby Mayors or the local legislative bodies that oversee EDGE. Reid Dulbeger, EDGE staff CEO, takes most of the direct criticism for EDGE. Dulberger is a highly competent bureaucratic administrator – the type of administrator that is needed for an organization like EDGE. But saddled with a highly deficient board, Dulberger gets hung out like many local staff of deficient MCCL boards. Problems in Memphis start at the top and board level as customer taxpayers are dismissed by the Memphis establishment. Its an establishment that has yet to globally define “economic development” which is needed to inform, drive and measure productive economic development efforts.

Workforce Development

For example and unfortunately, every major organization in Memphis has their fingerprints all over botched workforce development efforts to include EDGE, Memphis Chamber, Memphis Tomorrow as well as FedEx. While their have been signs of positive change at the Chamber, unfortunately they just punted workforce development  on first down to yet another new initiative after Mayor Strickland declared Workforce development the #1 economic development priority.

This is the second time the Chamber has punted workforce development with the first being when their Chairman’s Circle punted the Greater Memphis Alliance for Competitive Workforce (GMACW) initiative to EDGE. The most recent punt comes after stalled workforce development efforts over the past 4 years and local solutions are dismissed by the deficient MCCL complex in EDGE, Chamber and Memphis Tomorrow. And leaders, in the MBJ article, for some reason, don’t mention workforce as part of local economic development priorities.

In the EDGE meeting, a staff grant administrator for GMACW, in Alan Gumbel presented. Gumbel administers the Move-Hire grant that has resulted in a highly successful implementation led by the Greater Memphis Medical Device Council (GMMDC). GMMDC works to close the skills gap for the thriving Memphis biomedical device industry.  GMMDC counsels parents, students and teachers to help them better understand the great benefits of a career in the medical device industry. While still in high school, students can use the Tennessee Promise grant and dual enrollment classes to complete a diploma and then go directly into a job or an apprenticeship with no college debt. This is one career path that GMMDC advocates for when promoting careers in the biomedical industry.

But as far as connected workforce/education to employment efforts, GMACW has fallen short over 4 long years.  Staff, such as Gumbel, have been derailed by deficient board leadership and contracted partners that lack a track record of domestic United States workforce development experience. Simple connecting solutions in for example, a Chamber articulated alignment protocol to inform workforce development efforts, a common job board, student career portfolios or the use of the ACT National Career Readiness Certificate (NCRC) seem out of reach of a deficient MCCL complex.

At the EDGE meeting, Dulberger did sneak in the NCRC in his closing presentation but the NCRC was in small print in the corner of his presentation. The Strickland administration initiative that endorses the highly credible ACT NCRC solution strangely goes locally unpromoted. As a result and by high level choice, disconnected workforce development efforts persist in Memphis. Its like, for some reason, a large part of the solution for connecting workforce development efforts is a secret. So damn weird….

Conclusion

Disruption can be good but it has to disrupt the status quo. Without a largely new EDGE Board, needed disruption probably won’t happen.

About This Site –  Memphis Corporate Community Leadership (MCCL) Measured

With a special focus on Memphis Tomorrow, MCCL Measured is the first ever and exclusive tool to attempt to measure the effectiveness of Memphis Corporate Community Leadership efforts that use taxpayer money. The site is designed to facilitate financial literacy education regarding taxpayer funded initiatives. Additional videos and resources can be found by browsing the entire site or at http://mcclmeasured.net/resources .

Unable to articulate a workforce alignment protocol for employers’ needs to the workforce development system, The Greater Memphis Chamber is yet again, punting workforce development. This time the punt comes in the form of an announcement of a  a new initiative that includes a 9 month implementation schedule. Why wait 9 months? Why not go ahead and get started TODAY with connected workforce development?

Getting started with implementation immediately is the solution to local workforce development needs. And getting started does not exclude “shiny new” open platform programs such as Talent Pipeline Management (TPM) as advocated for recently by the Greater Memphis Chamber. In fact, as an open platform, TPM can be accommodated to come in and bless or supplement started work whenever it finally arrives.

But imperfectly Getting Started is the key, as educators and employers clamor for leadership on workforce development from the business community. While there are significant opportunities for TPM and the locally offered PathTrek process to work together, unlike TPM, the PathTrek process gets started today – while stressing the importance of using common language and the Strickland Administration endorsed ACT WorkKeys National Career Readiness Certification (NCRC) in support of workforce development efforts.

This article discusses the following:

• Chamber punt on workforce
• Getting started today with the locally offered PathTrek process for workforce development
• An overall favorable analysis of Talent Pipeline Management (TPM)

Chamber Punt – Implementation Woes

Getting started immediately is not going to happen if the Chamber punts workforce to yet another new initiative. Based on a recent Evanoff article , this time, the punt comes on first down to the “shiny new” Talent Pipeline Management (TPM) initiative after Mayor Strickland declared workforce as the #1 priority in economic development. Kicked aside are available local solutions and highly credible workforce development tools in for example, the ACT Work Ready program that goes unmentioned by the Chamber.

Previously, approximately 1.5 years ago, the Chamber punted its Chairman’s Circle Moon Mission in the Greater Memphis Alliance for Competitive Workforce (GMACW) program over to the Economic Development Growth Engine (EDGE). After that Chamber punt, EDGE just packed workforce in and went to the locker room. The cost of punting workforce is estimated to be $500M in lost wages and $15M in lost local tax revenue. A peculiar aversion to the unromantic work of implementation exists in Memphis. It’s Time to Get Started !

Given the local need, as voiced by educators and employers, implementation should not be delayed. Going back to the City Council Committee work over a year ago, starting at about 32:20 in the video, educators effectively beg for business community leadership in the form of a coherent centralized marketing approach to support workforce development efforts.

In search of an answer to centralization, in the video, Gary Rosenfeld smartly googles “Memphis Jobs” and Indeed pops up at the top of the list. For unknown reasons, in the meeting, the World’s leading job board in the easy to use Indeed to promote job openings as part of a coherent and centralized solution is shot down for advertising. Do what ? Advertising job openings is a problem ?!?!  Currently, Indeed is showing 12,000 Memphis job openings.

And at the “Age of Agility” conference, earlier this summer where Dr. Candice McQueen and Dr. David Rudd spoke, educators were most curious of how to get the business community involved in education. Business leadership is needed to support educators in meeting employer demand. Solutions to help facilitate that work were written about earlier this summer.

Locally Offered PathTrek Process – Time to Get Started !

The locally offered research based PathTrek process stresses Getting Started. Coming 4 years before TPM, but like TPM, the locally offered PathTrek stresses the use of career pathways and common language to support workforce development efforts with employers as the primary customer of the workforce development system .The use of common language is nothing new. After all, common language is what the ACT Work Ready Communities program is all about.

But unfortunately, driven by high level choices, common language in workforce development remains unimplemented after 4 years of dealing with the “elephant in the room” in the disconnected Memphis Corporate Community Leadership (MCCL) complex. MCCL has a special proclivity toward prioritizing excessive tax incentives and not the workforce in economic development work. MCCL consists of Memphis Tomorrow, Greater Memphis Chamber and EDGE.

The PathTrek process prioritizes workforce development and starts with a 1 day Getting Started implementation. The 1- day implementation includes ready to go elements in 1) publication of employer demand data and 2) the promotion of the Strickland Administration’s ACT Work Ready program.

Additional early implementation elements would encourage local leaders to select a common commercially available and reputable job board to promote local job availability and advocacy for the Greater Memphis Chamber to represent the workforce development needs of employers through the articulation of an alignment protocol. A workforce alignment protocol helps to define and guide local workforce development efforts much like a definition for “economic development” would guide local economic development work. But Memphis has neither. Without an overarching alignment protocol for employer needs, the workforce development system does not know how to align their efforts to serve their primary customer in employers.

Informed by a workforce alignment protocol, academic standards-based curriculum alignment and implementation would occur over the first 3 months. While like TPM, PathTrek is a flexible open platform, when recommending implementation assets, PathTrek recommends world leading best of breed tools. Examples include: 1) O*NET for an occupational information data source, 2) Indeed job board technology and 3) ACT Work Ready assessment tools. Please proceed here to learn more about PathTrek.

About Talent Pipeline Management

The open TPM process has several attractive elements that recognizes the employer as the customer of the workforce development system and includes 1) data demand driven employer requirements and 2) common language development to facilitate professionally diverse stakeholder communication.  At the same time, the US Chamber authored TPM, as written, comes with a 9 month implementation schedule and lacks meaningful definition, educational and learner supports. For instance, there is not any definition or discussion around the universal concepts of academic standards or the use of O*NET which is the world leader in occupational information.

While light on specific non-binding examples, perhaps because of its open design, TPM provides a framework for the insertion of workforce development implementation assets which could involve a range of potential providers. It is suspected that TPM’s partner in Strada Education and its affiliates would sell product into the framework. The partner network seems mostly geared for post-secondary and adult audiences. Some TPM products may be locally needed at some point others perhaps not, hence the accommodating open TPM process design.

Strada affiliates include the Center for Adult Experiential Learning, College Confidential, DXtera Institute, Education at Work, EMSI, Inside Track and Road Trip Nation. Of the former providers, based on services ready to go today on the ground in Memphis today and locally researched, competition exists between EMSI and Road Trip Nation.

Overall, the TPM framework provides a solid process for connecting workforce development efforts. The process organizes employer groups and leverages employer demand data to inform common language development, curriculum and program offering while measuring results to inform workforce development improvement efforts.

Solution – Get Started !

The major downside to the otherwise favorable TPM process,  is the 9-month implementation schedule and not Getting Started right away. Imperfectly and expeditiously getting started is paramount ! So how to go about Getting Started ?

1. Determine a centralized job board. How about Indeed, the World Leader?
2. Publish Employer Demand Data – Its ready to go now !
3. Promote ACT National Career Readiness Certificate (NCRC) and get as many NCRCs administered as possible by June 1, 2018
4. Work with Chamber on a simple alignment protocol to generally inform the workforce development system of customer employer needs
5. PILOT ready to go career planning curriculum in Q1/Q2 and implement Q3/Q4
6. Wait for TPM to arrive

Getting Started with implementation has several benefits. In fact, not Getting Started will result in more of the same. Getting Started is likely to result in improved workforce development outcomes. And after Getting Started with improving workforce development efforts that translates into improved economic development outcomes for all. That is why Getting Started is so important.  Let’s get started !

The evaluation and improvement of tax incentives should start with a newly appointed Economic Development Growth Engine (EDGE) Board and the termination of retention and residential payment-in-lieu of taxes (PILOT) programs. Retention PILOTs abate taxes against existing tax revenue and Shelby County is the only County in the State that abates taxes for multi-family residential construction.

Questioned often, the goal of this website is to educate Memphis and Shelby Countians through financial literacy. Unknown to most, the community has been invested in decline though policy for some time. This comes as a result of low expectations, lack of implementation, lack of investigative press, an unchecked out of control EDGE Board and until recently, poor legislative oversight.

Decline seems to have been going on for so long that the highly educated pubic cannot see the deficiency as carried out by Memphis Corporate Community Leadership (MCCL). New, recently announced Memphis Public Libraries financial literacy efforts should consider the resources offered by MCCL Measured as a core element in taxpayer financial literacy education.

And while encouraging to see workforce as the #1 economic development priority, new Strickland administration efforts will hopefully focus on defining what economic development is and is NOT. Discouraging about the Strickland announcement is the lack of a completed plan or the release of the trumpeted Mass Economics Study after 8 months of local economic development study.

Recently, it was reported in the Memphis Business Journal that 1 of the 11 recommendations of the Memphis City Industrial Development Board Committee that EDGE tax incentives should be “evaluated and improved”. But for who?

In this evaluation and improvement exercise, hopefully the taxpayer is viewed as the customer when using public funds. But based on the results, it cannot be assumed that MCCL views the customer as the taxpayer. After all, through testimony, its public information that local taxpayer funded economic development efforts have, over time, lacked a plan, effective measurement or even a definition for economic development. This occurs while excessive incentives sacrifice the work that attracts and supports economic growth in the development of small business, a reliable workforce, public transit and available sites.

Best of the Worst of EDGE

While there are several examples, the “Best of the Worst of EDGE” in excessive PILOTs goes to help define what economic development is NOT. Since this is not a reflection of the companies but of economic policy, in the spirit of new legislative recommendations, the companies are kept anonymous. See below examples of what economic development is NOT.

• At the Board level, Greater Memphis Alliance for Competitive Workforce (GMACW) efforts largely put on hold in favor of granting corporate / real estate tax incentives.
• Blind commitment to excessive corporate/real estate tax incentives as small business vitality tanks .
• $25M tax abatement to retain a refinery that is going absolutely nowhere.
• $50 tax abatement to retain a sports apparel company while transferring $50M of wealth from one of the most impoverished areas in the country in Memphis at (27%) to one of the least impoverished at (13%) where the company headquarters is located. Abated tax proceeds appear to indirectly support a social justice ad campaign of the company currently underway.
• $5M in taxes abated for retaining a chemical company that is going nowhere that saves $1M per year using high quality Memphis water resources.
• $6M in taxes abated to retain a pharmaceutical company in a renewal of a PILOT after employment had decreased for the company since being in Memphis. The renewal gives the company a 28-year PILOT. The $6M is being transferred from Memphis with a 27% poverty rate to the wealth center of the world where the company headquarters is located.
• $19M in abated taxes awarded to 2 developers for residential multi-family construction which is $19M more than the developers would have received in any of the 94 other counties in the State of Tennessee.

Take in the above and know that there are 9 other tax abating boards in Memphis / Shelby County that are not getting the EDGE microscope. Whoa !

Conclusion – Who and What ?

Memphis Raise Your Expectations (MRYE) and MCCL Measured have been advocating for the adoption of a definition of economic development by local legislative bodies in “economic development is a process to improve the social well being of people”. This would be measured using external data sources in the Bureau of Labor and Statistics program of Quarterly Census of Employment Wages that would measure total percentage wage growth versus 15 Shelby County peers as identified by The Memphis Economy of the University of Memphis. 

Challenges to the former is that the people, in MRYE, are not listened to in a Crump like rigged up system. Gotta stop listening to the same rotating band of people all of the time. Please see previously written blog on this subject.

As far as a connected approach to workforce development, MCCL Measured has been advocating for and supportive of Strickland Administration announced programming that has seemingly remained unimplemented and effectively not adopted by the Greater Memphis Chamber through a lack of promotion. The consistent lack of local implementation on behalf of taxpayers and employers is just strange and part of the decline by design local community leadership culture.

If the taxpayer is viewed as the customer, implementation should take center stage with retention and residential PILOTs terminated and the appointment of largely a new EDGE Board. This will mark an improvement in economic development policy and a move away from community disinvestment and toward community investment.

In the meantime, the public awaits answers on two questions 1) Who is the customer in taxpayer funded economic development efforts ? and 2) What is economic development ?

About Memphis Corporate Community Leadership (MCCL) Measured

MCCL Measured is the first ever and exclusive tool to attempt to measure the effectiveness of Memphis Corporate Community Leadership efforts that use taxpayer money. Additional videos and resources can be found by browsing the entire site or at http://mcclmeasured.net/resources .