“Delta Vision, Delta Voices”

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II. Revitalizing the Regional Economy

“Over the last six months, I’ve traveled to communities from Appalachia to the Mississippi Delta… Everywhere I go, I meet talented people eager for opportunity, and able to work. Tonight I ask you, let’s put them to work. For business, it’s the smart thing to do. For America, it’s the right thing to do.”

President William Jefferson Clinton, 2000 State of the Union Address

The 20 Federal agencies participating in the Mississippi Delta Regional Initiative Interagency Memorandum of Understanding have pursued a variety of policy and program actions in order to promote the economic progress of the region. These initiatives cover a broad spectrum—job growth, transportation, agriculture, infrastructure, business and industrial development, tourism, promotion of a well-educated, and skilled workforce, among many others. Many of these activities relate closely to the other sections of this Report regarding improving the quality of life and promoting natural resources, environmental preservation, and tourism.

The investment of private enterprise in the Mississippi Delta is fundamental to its future prosperity. Without such investment, there can be no prosperity. Generations upon generations relied upon agriculture, and understandably so, given the incredible richness of the soil. This deflected other investments, however, as has a legacy of racial division and a workforce whose educational achievement lags behind that of other regions. Yet, the assets exist, from natural resources to the tenacity of its people, and these assets are coming to bear as the general prosperity of the nation and the national recognition of the Delta’s qualities positively influence business investment decisions. It will be the combination of actions by government and business, the wise promotion and use of its resources, and the development of strong indigenous leadership that will point the way toward economic success. The Federal government in its own right has a powerful role to play in this central issue for the Delta.

Partnerships among Federal, State, local governments, businesses, and grassroots organizations: Delta Vision, Delta Voices recognizes that the Federal government is only one actor in the quest to promote the region’s economic advancement. Progress in the region depends upon active pursuit of effective coalitions of Federal, State, local, private business, nonprofit foundations, and other grassroots organizations to meet the challenges the region will face beyond the year 2000. The Federal agencies offer a series of recommendations on how best to address the remaining challenges facing economic growth in the region—always recognizing that public/private partnership must drive them. (The “Voices of the Delta” section that follows this section of Federal recommendations entirely consists of recommendations and goals from grassroots sources concerning the region’s future development.)

Before discussing the recommendations, it is important to summarize briefly the context for this issue in recent years.

Job growth: The unemployment rate for the entire 219-county Delta region declined from 7.5 percent in 1993 to 4.2 percent at the end of 1999. From 1993 to the beginning of 1999, 184 of the 219 counties experienced job growth. There were some substantial success stories, such as declining unemployment rates for the major regional urban areas, including Pulaski County, Arkansas; Jefferson Parish, Louisiana; Shelby County, Tennessee; and Hinds County, Mississippi. Fewer rural areas experienced such improvement, with a few, such as Madison Parish, Louisiana, saw the unemployment rate fall from 14 percent in 1990 to 7.5 percent in June 1999.

Although many areas in the region have experienced limited progress in reducing unemployment, poverty rates remain far too high in many counties. Over half of the Delta counties had poverty rates over 20 percent for four decades. The poverty rate in the distressed counties of the region is 32 percent, compared to a national rate of 13 percent. In addition, the per capita income in the Delta’s distressed counties is only 53 percent of the national average.

President Clinton signed the Balanced Budget Act of 1997 (which provided $3 billion in WtW grants) and the Workforce Investment Act of 1998. The Department of Labor and other agencies explore the impact of these laws in detail in the Interim Report and the “Inventory” on the Department of Transportation’s Delta Website at http://www.dot.gov/delta. Virtually all of the participating agencies pursued policies directly or indirectly related to job growth, such as welfare-to-work, transportation, small business promotion, Empowerment Zones and Enterprise Communities, and other economic development initiatives.

Persistent unemployment dilemmas in rural areas and inner cities: Some inner city neighborhoods have not participated in the overall urban prosperity, and rural areas in general lag behind the national unemployment rate. In fact, some rural counties suffer from unemployment rates two and three times as high as the national average. In Arkansas, St. Francis County’s unemployment rate, for example, while declining from 13.4 percent in 1993 to 9% in 1998, is still at an unacceptable level. The continuing unemployment problems in many rural areas pose the greatest remaining challenge in the region’s employment horizons.

Need for expanded resources for the Delta: The Administration recommends devoting an additional $159 million in total Federal expenditures to address the profound social and economic needs of the Delta. Additional funding for the region should continue over the fiscal years from 2001 to 2005. This amount is over and above the current anticipated and proposed expenditures for that region across the Federal government. Given the size of the region, and appreciating that it has not experienced the full impact of the nation’s prosperity over the last few years, this is viewed not only as a reasonable but necessary commitment of additional resources aimed at uplifting this historically impoverished region.

TRANSPORTATION

Advances in the region’s transportation system play a crucial role in economic development. In 1990, the Lower Mississippi Delta Development Commission’s (LMDDC) 10-year goal envisioned an improved network of limited access highways, airports, and rail and port facilities to promote economic growth. The great majority of the nearly 70 specific transportation recommendations in the 1990 Report The Delta Initiatives have either been completed or substantially fulfilled.

The LMDDC made several general highway recommendations, beginning with one urging that Congress and the President should release funds currently being held in the Highway Trust Fund. Highway Trust Fund investment in highways and transit was increased dramatically by the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) and the Transportation Equity Act for the 21st Century of 1998 (TEA21). ISTEA authorized $151 billion over six years for highway and transit programs while TEA21 went several steps further, providing new programs, new flexibility, and new guarantees of funding for the States. The 1998 act created new budget categories for highway and transit discretionary programs, establishing a budgetary firewall between the surface transportation programs and other domestic discretionary spending. As a result, TEA21 guaranteed a spending level of $198 billion over six years. In addition, TEA21 increased to 90.5 per cent the minimum annual return on contributions to the Highway Trust Fund for every State. The Delta region States are expected to receive additional Federal transportation funding as a result of this provision.

The Great River Road: Another major recommendation of the 1990 Report stated that Congress should prioritize funding for the Great River Road and immediately provide funds for its completion. Individual States are using the flexibility established in ISTEA and TEA-21 to fund improvements to the Great River Road and other major highway-related facilities. In Arkansas alone, since 1990 about 120 miles of improvements, including easements, historic preservation, highway reconstruction, highway resurfacing and major widening, have been completed at a cost of about $140 million.

Rail service: DOT has engaged in a series of rail service improvements in the region. For example, in November 1998, Secretary Slater announced the designation of the Gulf Coast High Speed Rail Corridor linking New Orleans with Baton Rouge and other cities in the South. Under TEA-21, this corridor received approximately two million dollars in earmarks for high-speed rail development and grade crossings. AMTRAK has proposed, based on its recent market-based analysis, to expand passenger rail service on the Crescent between Meridian, Mississippi and Texas, a route traversing a large section of the Delta. Furthermore, Secretary Slater announced on March 3, 2000, $1.96 million in additional funding to the Greater New Orleans Expressway Commission for pre-construction planning activities for the proposed New Orleans-St. Tammany Parish magnetically levitated rail system. No Federal funds are planned to be provided for construction of this project. If built with non-Federal funds, the Greater New Orleans project would connect Union Passenger Terminal to the airport and cross Lake Ponchartrain to reach the suburbs of St. Tammany Parish.

Aviation: The Federal Aviation Administration (FAA) provided over $400 million in financial assistance from Federal discretionary and entitlement funds allocated from the Federal Airport and Airway Trust Fund for Airport Improvement Program (AIP) projects to over eighty airports within the Mississippi Delta between 1993 and 1999. Federal legislation authorizes the Secretary of Transportation to make project grants for airport planning and development under the AIP to maintain a safe and effective system of airports. Eligible projects under the AIP include airport system and master plans; construction, expansion or rehabilitation of runways, taxiways and aprons; items needed for safety or security; navigational aids; land acquisition; noise control; and limited terminal development.

Summary of Airport and Airway Trust Fund ExpendituresMississippi Delta region
FY 1993 – FY 1999

State	No. of Airports	Expenditures (millions dollars)
Arkansas	20	51.0
Illinois	8	2.0
Kentucky	5	7.4
Louisiana	21	182.6
Mississippi	9	33.8
Missouri	9	11.3
Tennessee	9	123.0
Total	81	411.2

Completion of the Commission’s transportation projects: The heart of The Delta Initiatives’ transportation recommendations consisted of a detailed inventory of transportation improvements for the highways, aviation, maritime, and rail network of the Delta. Probably no other area discussed in the 1990 Report contained such a large number of highly specific recommendations; and probably no area now displays as many successful completions of those recommendations. These efforts were led by the Department of Transportation, with important contributions from the Army Corps of Engineers and other agencies. The Corps, Transportation, Commerce and other agencies also contributed substantial Federal investments in the area of maritime transportation.

For example, Commerce funded feasibility studies for port facilities in seven communities of Louisiana alone. The Corps completed over 30 navigation projects along the Mississippi River, while DOT completed numerous maritime transportation projects throughout the entire region. As noted above, the great majority of the nearly 70 specific recommendations for all modes of transportation in the original Report have either been completed, or significant progress has been made in completing them. These transportation projects have provided a powerful impetus to improving the quality of life and of economic development in the region.

Transportation Goals and Recommendations

While substantial progress has been achieved in improving the region’s transportation network and service base, many challenges remain in the effort to ensure fully adequate transportation. Transportation for the Delta’s citizens to employment opportunities, schools, health care, child care and other essential daily services and destinations is vital to the region’s future, and in rural areas particularly many needs remain. The first recommendation, of course, is support for continuing and building upon the fundamental transportation successes summarized above and ensuring a livable environment. Additional transportation recommendations are included in the tourism section of this Federal section, in the discussion of “enhancing tourism”. The following are some specific proposed solutions for addressing the remaining issues and completing unfinished business:

• I-69: The construction of the I-69 High Priority Corridor will extend from Sarnia, Ontario, Canada to Brownsville, Texas at the Mexican Border, and will result in major benefits for the nation’s transportation system, as well as the Delta region. The Corridor is expected to generate 27,000 more jobs and $11 billion in wages over a 30-year period. TEA-21 authorized $140,000,000 for each of fiscal years 1999 through 2003 for the “Corridors and Borders” program, which is for planning, environmental studies and construction of high priority transportation trade borders and corridors. As the lead State for the nine States through which the corridor runs, Arkansas received a $10 million award under the Borders and Corridors Program for environmental studies in the entire I-69 corridor. An additional $25 million in Borders and Corridors Program grant funds have been awarded to other States for uses that will benefit the I-69 corridor. In 1999, work began on a special environmental study for the corridor. This study will allow independent and regionally significant projects to advance more quickly within the I69 corridor. Substantial funding from all levels of government is essential for the future development of this important contributor to the Region’s economic growth and development.

• Great River Bridge: Promising essential new access across the Mississippi River between Arkansas and Mississippi, this bridge facility has moved closer to development, with the identification of a preferred corridor and a supplemental environmental impact statement. Estimated to cost between $580 and $670 million, the bridge is another essential economic lifeline for the region.

• Training: Many people in the region have conveyed the view that a great need exists for information on the programs, activities and related funding of the Federal government and how to access them. We propose a continuing set of training/information sessions for stakeholders, including local government officials, private non-profit groups, and other interested parties to improve familiarity with the programs of DOT and the process for using them. The project would use existing funds that now go for a variety of outreach and training activities, and would also coordinate with other agencies and departments, as appropriate, that would be providing their own training and education programs.

• Access: Residents of the vast rural areas and numerous small towns of the Delta suffer from disproportionate isolation and diminished opportunities due to limited access to services. As an example of these proposed activities, in its proposed fiscal year 2001 budget, the Department of Transportation proposes that $20 million to address such needs come from programs administered by the Federal Transit Administration. Of that amount $15 million would go for Federal Transit Administration Bus and Bus Related Capital Investment Program and $5 million for that agency’s job access/reverse commute program.

MID-SOUTH COMMUNITY COLLEGE TRANSPORTATION CENTER PROJECT: WEST MEMHPIS, ARKANSAS

Federal, State, local, and private sector partners are working with Mid-South Community College (MSCC) on a project for a state-of-the-art transportation center to be developed in Crittenden County, Arkansas. The center would provide related education and training opportunities for Delta residents as part of a comprehensive approach to local economic development in direct support of existing and future transportation industry needs. This proposal addresses the primary reason for the lack of economic prosperity for the majority of Delta residents and the key frustration for existing business and industry—the lack of extensive training opportunities which provide the education and skills for jobs already present or emerging in the Delta. Developed and supported through a partnership with area high schools, two and four-year colleges, private enterprises and government agencies, the proposed center would provide a continuum of educational advancement in a variety of transportation-related fields.

This proposal also includes the establishment of high technology facilities on high school campuses throughout the region to enable the effective delivery of training to high school students as an integrated part of their daily curriculum. To break the cycle of unemployment and underemployment in the Delta, high school programs must be developed in addition to, and coupled with, adult learner and business training programs that grow jobs for those being trained.

Importance of the proposed location: Crittenden County, Arkansas is located in the central United States on the Mississippi River and at the intersection of Interstates 55 and 40, the nation’s second most highly traveled crossroads. Geographically, it is one of the few locations in the United States that has major rail, intermodal, trucking, river port, and airport facilities within a 15-mile radius of each other. Memphis, Tennessee, the recognized Distribution Center of America and the headquarters of Federal Express and FDX is located just 10 minutes away across the Mississippi River. In addition to FedEx, 15 other cargo airlines operate in Memphis. Over 200 truck terminals are located in the region, offering direct service to mainland America, as well as Canada and Mexico. Neither the East nor West Coast is as easily accessed as is this part of the country. This central location allows companies to ship products to customers in any part of the world in less than 48 hours.

Transportation and distribution industries are rapidly expanding in the Mid-South region. The Memphis area alone counts 87,000 jobs directly related to the distribution industry. Typical examples of local growth include the recent addition of one of the nation’s largest, most technologically sophisticated intermodal facilities in Marion, Arkansas. A $1.4 million expansion of the West Memphis riverport and more than $15 million in capital improvements at the West Memphis airport also reflected this development. In Memphis, UPS is in the process of constructing an $80 million consolidated ground/air hub. Simultaneously, the Memphis International Airport, the world’s busiest cargo airport, is undergoing a 450-acre expansion to help accommodate a growing influx of national distribution companies in the Mid-South.

While business expansion is taking place, economic development in many places continues to lag. The transportation industry requires a skilled workforce and innovative, high-tech solutions to its daily operational challenges to remain competitive in the global marketplace. Unfortunately, current economic development initiatives in Arkansas, which provide funding for industry training, such as tax credits and existing workforce training, exclude the entire transportation industry. Consequently, one of the areas with the greatest potential for workforce development in the Delta has no organized program for training workers.

A transportation technology center that provides a continuum of educational programs for high school and college students, as well as current and future industry employees, is the solution for ensuring a trained and educated workforce and positive economic growth. Locating that center in Crittenden County, Arkansas enables ready access to experts in all fields of the industry to provide direction with curriculum development and ongoing opportunities for lab and training experiences.

Facilities located in the heart of the Delta: Supporters of the proposal recommend construction of two college facilities comprised of training classrooms and laboratories, to provide state-of-the-art education in all aspects of the transportation industry. The main industrial site of the Delta Transportation Technology Center will be located in or contiguous to the Mid-America Industrial Park in West Memphis, Arkansas. This location is appropriately zoned for all the necessary heavy transportation training. The location of the facility in the Industrial Park provides easy access for local business representatives to participate in ongoing development and advisory activities. In addition, students will be able to work in internship and guided study opportunities at those same companies prior to employment. The convenience of this location will also serve as an incentive for additional businesses to relocate in and around an industrial park situated in the heart of the Delta.

Satellite Transportation Technology Centers: As stated above, the key to this proposal is in providing a continuum of educational training opportunities starting with high school students. The only way for this to be done and ensure access and a consistent delivery of high quality, technically accurate training is to build branch transportation technology centers at or around high school campuses. Satellite transportation study centers could be established at high schools in cities including, but not limited to, West Memphis, Marion, Earle, Turrell, Crawfordsville, Hughes and Parkin. After implementation, this model could be expanded and duplicated in high schools throughout the Delta region, and ultimately throughout the entire country.

Regional transportation plan: Delta leaders have expressed great interest in the formulation of a Delta region transportation plan. The proposed plan would give direction to the Delta’s region-wide transportation needs. It would also send a loud signal to the national and global business community about the region’s potential as an attractive business location. The plan could be aimed at coordination activities among States and localities and technical assistance, plus other funds that States and metropolitan planning organizations may contribute from regular formula allocations. The proposed Delta region plan would also highlight interstate intermodal facilities. The Department would provide funds to bring States and Metropolitan Planning Organizations (MPOs) together around the idea of a coordinated process to develop a plan and then provide technical assistance and related support in the actual development of such a plan. The development of a Delta region transportation plan could be an enterprise of the legislatively proposed Delta Regional Authority, which would work in concert with State departments of transportation and MPOs, and their representative associations, such as the American Association of State Transportation Officials and the Association of Metropolitan Planning Organizations.

Other transportation projects: Transportation development, particularly intermodal connections and elimination of bottlenecks, among other projects, are highlighted by local and State leaders as critically important to the enhancement of economic opportunity in the Delta.

Highlights of Recent Transportation Activities in the Delta

Many vital transportation activities were underway in the Delta during 1999 and 2000. The following are several major examples of the ongoing efforts to improve the region’s transportation network:

Four-laning of U.S. 61 from the Tennessee state line to the Louisiana state line is progressing well. The segment from the Tennessee state line to south of MS 4 is complete and open to traffic. Paving for the segment from south of MS 4 to south of Coahoma County, Mississippi near U.S. 49 is scheduled to be completed in June 2001. The segment from the Coahoma County line to Clarksdale, Mississippi is complete. The section from Clarksdale to the Bolivar County, Mississippi line, which includes the Bypass of Clarksdale, has been awarded for grading and bridges, and is about 55 percent complete. Paving for this segment is scheduled to begin in September 2000 at an estimated cost of $10 million. The section from the Bolivar County line to Shelby, MS, has just begun. The paving contract for the section from Shelby to Merigold, Mississippi is about 50 percent complete, and the segment from Merigold to Leland, Mississippi is complete and open to four-lane traffic.

Nine airports in Mississippi received over $120 million in Federal Airport Improvement Program (AIP) assistance since 1993. Jackson International is the most active airport in the State and benefited from improved air service in the past few years including the introduction of low fare service and the substitution of all-jet service for previous prop service. This increased use has resulted in more wear on the airfield pavements requiring overlays and rehabilitation. The soil conditions in Mississippi result in substantial expansion and contraction, which requires more rehabilitation and overlay. This maintenance was performed at Olive Branch, Greenville, and Yazoo City airports among others. Greenwood’s airport serves as an aircraft salvage yard for the disassembly of air transport aircraft. Apron and taxiway improvements were made at Greenwood.

In Clarksdale, Mississippi a Transportation Enhancement Program grant amounting to $1.6 million has helped transform the old train station there into the Blues Museum. The depot also houses several businesses and includes an area for bands to perform. An additional $870,000 in Transportation Enhancements Federal-aid funds has been provided to acquire and restore the historic Greyhound Bus Station and to purchase and refurbish vintage rail cars for a museum exhibit on the existing rail spur adjacent to the bus station and the recently restored Clarksdale Depot. The Greyhound Bus Station will be used as a tourist information center and will accommodate tour buses. The project is currently in the design stage. These projects are a focal point for Clarksdale’s effort to revitalize the central city area and to promote tourism. They provide jobs in both the service and industrial sectors.

The Memphis International Airport is in the midst of a multi-million dollar expansion program, including the completion and opening of a new east parallel runway in 1996. A center parallel runway will be completed and open in late 2000. Since 1990 the FAA has approved airport improvement projects for airports in the Memphis region totaling $211.6 million. Integrally related to the airport work is the reconstruction and widening of a highway near the Memphis Airport to improve access for airport patrons and the Federal Express distribution center. All of this activity supports the evolution of Memphis as a distribution center for the nation and a key economic center for the Delta, resulting in major economic development and substantial job growth for the region.

Crowley’s Ridge Parkway, Arkansas’ only National Scenic Byway is a 200-mile route running through eight counties in the Arkansas Delta that is already generating job growth. Local authorities expect that the Byway will generate 160 new jobs directly related to tourism in the area. Arkansas received more than $1.03 million in fiscal year 1999 Scenic Byways discretionary funds for 3 projects along the Crowley’s Ridge Parkway:

• $324,000 for development of educational and promotional material for the Parkway;

• $630,148 for development of a visitor/interpretive center in Piggott, Arkansas, at the HemingwayPfeiffer Museum and Education Center; and

• $91,776 to establish a student internship and service learning program in association with the management and development of the Parkway and development of a hiking/biking trail and an African-American Tour along the Parkway.

The interpretive center was officially opened in July 1999. The town of Piggott, with less than 4,000 people, has opened or expanded 16 new businesses, with eight of them directly related to tourism; formed a downtown revitalization committee to develop a master plan; and hosted architectural students from the University of Arkansas Community Design Center to assist with the project. Similar economic benefits are occurring elsewhere along the parkway. Five of the eight county seats along the parkway are developing downtown revitalization plans, three new museums have opened, historic structures are being renovated, and improvements are being made in the five State parks along the ridge.

Light Rail in Memphis, Tennessee: The first extension of Memphis’ vintage trolley system, connecting the Main Street Trolley with the Memphis Riverfront, has been completed. The Medical Center Rail Extension is envisioned as the last segment of the downtown rail circulation system, as well as the first segment of a regional light rail line. The Federal Transit Administration (FTA) approved the Memphis Area Transit Authority’s request to enter preliminary engineering for the rail extension, and this engineering work was completed in late 1999. The capital cost of the project is estimated at $30,400,000. Congress appropriated funds for the Memphis Regional Rail in fiscal years 1994 and 1996-99.

In the President’s FY 2001 budget, the Administration requested $14.2 million for the Memphis Medical Center Rail Extension project as a Full Funding Grant Agreement.

Memphis Central Station Intermodal Terminal: This project involves renovation of a historic train station to create a facility that will be used as an intermodal terminal for MATA buses, trolleys, and AMTRAK. Its estimated cost is $23 million, with an estimated Federal Transit Administration participation of $14.3 million. Private sources will provide approximately $5.5 million. Memphis received $3.9 million for this project in fiscal year 1993, and another $8.7 million in FY 1995. Site improvements and building restoration have been completed. Part of the building will be leased to private businesses, and other areas will be provided for a day care center. MATA’s Information Center and a police substation are housed on the first floor. The Career Center was officially opened in 1999. Various agencies housed in the center provide job counseling, training, and placement services for clients making the transition from welfare to work.

The West Memphis’s new transit service partnership with Memphis Area Transit Authority officially opened in June 1999, with vital support from the mayors of West Memphis, Arkansas, Memphis, Arkansas’ First District Congressman Marion Berry, and State Department of Human Services representatives. This effort was the product of the Crittenden County TEA Coalition, utilizing State Department of Human Services funds which provide seed money for Welfare-to-Work initiatives. MATA busses will provide one local route to key destinations for medical, shopping and other needs, as well as an express route to and from Memphis.

The Central Arkansas Transit Authority (CATA), in Pulaski County, is Arkansas’ largest grantee. To date, CATA has received 19 grants for a total of $31,568,518. The grantee currently has 6 active grants with total obligations of $11,268,430. Two recently approved grants include $180,000 (part of an FY97 earmark) for preliminary engineering and project management services for a River Rail Project, and $794,000 for a Downtown Transfer Center. Another example of transportation projects is a $485,000 Job Access grant to CATA that will provide dependable and low-cost transportation for those moving from dependency into self-sufficiency. New services will include extending the reach of the present system into fast-growing retail and service employment areas with vans operating on flexible schedules and routes. The grant will provide:

• a one-time start-up of five vans for employees of a local business;

• a mobility manager to develop transportation agreements and programs for coordinating transportation for those entering the job market within the Little Rock Enterprise Community; and

• “graveyard shift” service from local hospitals to downtown transfer center and “night owl” distribution runs with user-side subsidy of taxi service or publicly owned vans.

Highway projects in Kentucky: The Delta counties of Kentucky have received over $194 million in Federal funds for highway construction and rehabilitation since 1993. Projects have included major rehabilitation on the Western Kentucky, Pennyrile and Purchase parkways, and bridge and approaches on U.S. 51 in Ballard County and on U.S. 60 in Livingston and McCracken counties. Additionally, a study for a potential I-69 Connector from I-24 to Marion County has been conducted, as well as a study for a potential I-69 alignment around Henderson from Pennyrile Parkway to the Ohio River crossing.

The State of Illinois has been allocated $749,000 in FY 2000 National Scenic Byways discretionary grants for the Ohio River Scenic Byway, entirely located within the Delta region of Illinois. These funds are available for various enhancements such as marketing programs, safety pull-offs for farm machinery, visitor centers, restroom facilities, and interpretive kiosks. These grants are expected to stimulate commerce and tourism along this designated National Scenic Byway. In addition, prior to FY 2000 and since FY 1992, FHWA has obligated $162,000 in National Scenic Byways funds for enhancements to this byway.

Many other examples of transportation activities are underway in the region, in addition to the projects cited above. These projects demonstrate progress and the ongoing commitment to improve the transportation network for people throughout the Mississippi Delta.

SMALL BUSINESS DEVELOPMENT, ACCESS TO CAPITAL, AND ECONOMIC EMPOWERMENT

I am very proud to represent a region of our great nation—the Mississippi Delta—that is so rich in history and so full of promise for the future. The Delta’s tremendous natural resources, vital culture, and location along America’s mightiest river have drawn residents and visitors alike to this wonderful region. However, the Delta continues to face significant challenges, and it has not shared in America’s booming economy of the last several years. Some of the most economically distressed communities in the country are in the Delta, and the region desperately needs additional resources to address chronic hunger, poverty, unemployment, and low education rates… The Delta’s prospects are very bright, so long as there are those who are willing to work together. In flood control, health care, transportation, education, economic development, and other areas, the Delta is poised to make great progress. I am heartened by the knowledge and firm belief that the best days of the Delta are just ahead.

U.S. Representative Jo Ann Emerson, Missouri

A variety of job creation and retention initiatives, welfare-to-work projects and other initiatives have been promoted in the Delta. The Small Business Administration (SBA), the Department of Labor, USDA’s Rural Business-Cooperative Service, the Department of Commerce, and the Department of Treasury have especially important policy development roles in these action areas fundamental to job generation and community building.

In 1990, the Lower Mississippi Delta Development Commission noted, “the central challenge facing the Delta is to develop a strong business and industrial sector that will enable the region’s economy to be one of growth and vitality….” Using innovative methods, such as “circuit riders,” which was announced as a pilot program in Eastern Arkansas during President Clinton’s visit to West Memphis on December 10, 1999, SBA’s field offices and resource partners located throughout the region are conducting extensive outreach activities in and to the Delta’s small business community. More “user-friendly” activities focus on informing small businesses about available financing programs, training and technical assistance resources.

Access to capital: Since 1990, SBA has repeatedly emphasized the effective deployment of its existing programs along with streamlined procedures to make it easier for small businesses to gain access to capital. For instance, since 1990, SBA’s 504 program (offering fixed rate financing on purchases that also serve a public purpose) has loaned $1.2 billion in the region operating through 41 lenders. SBA has also developed new programs. For example, in 1991 the Microloan Program, inspired by a community-lending program in Pine Bluff, Arkansas, was established to serve the Delta’s smallest businesses. As many as 14 intermediary lenders in the Delta have provided over 1,000 SBA funded microloans. These loans have been powerful engines for job creation and retention.

New resources, such as the Mid-Delta Enterprise Community’s One Stop Capital Shop in Itta Bena, Mississippi, and Women’s Business Centers in Arkansas, Kentucky, Louisiana, Mississippi, Missouri and Tennessee have been created to help small businesses obtain the financing and technical assistance critical to building a successful small business.

New Markets Tax Credit: The New Markets Tax Credit will be administered by the U.S. Department of the Treasury and will be worth up to 25 percent for investments in a wide range of investment vehicles serving New Markets communities, including New Markets Venture Capital Companies (NMVCs), America’s Private Investment Companies (APICs), community development banks, and other targeted investment funds. For FY2000, the President requested spending $1.2 billion over five years for such tax credits. In FY2001, President Clinton is requesting $3 billion to be used for New Markets Tax Credits, which are designed to spur $15 billion in private New Markets investments. The Delta, of course, is one of the primary areas the New Markets Initiative is intended to benefit.

Small Business Goals and Recommendations

Providing outreach to New Markets in the Mississippi Delta region: SBA recommends increasing the amount of financial, business, and procurement assistance available to the Delta region’s minorities, women, veterans, and small firms located in low and moderate income urban areas. SBA will continue to work in partnership with local civic associations and community groups to increase lending to entrepreneurs in the Delta. SBA loan officers will continue to make bank visits to Delta county banks that have the potential to become proficient and active SBA lenders in the future.

Increasing small business access to credit: SBA will assist Delta small businesses in contributing to economic growth through increased start-ups, which will provide new jobs. SBA will focus on increasing the aggregate number of 7(a) general business loans, Certified Development Company (CDC) loans, investment capital financing, export loans, Microloans, and surety bond guarantees in the Delta region. SBA, through the use of circuit riders and other innovative outreach methods, will focus the distribution of credit on new small business markets.

Enhancing entrepreneurial development in the Mississippi Delta region: SBA will increase counseling to small businesses through its network of: district offices; Business Information Centers; Women’s Business Centers; Small Business Development Centers; Service Corps of Retired Executives; and One Stop Capital Shops. New resources, such as SBA’s Mid-Delta One Stop Capital Shop, will help small businesses obtain the technical assistance critical to becoming successful. In addition, SBA, working with resource partners, will continue its efforts to create new entrepreneurs from both the welfare and disability communities through counseling and technical assistance.

Providing information and technical resources through SBA’s E:Small Business: SBA is committed to helping the Delta’s existing small business owners and those with an entrepreneurial spirit gain access to the information needed to create, run and build a successful small business. SBA recognizes that small businesses located in rural areas may not be able to visit a SBA office or resource partner location. SBA is offering numerous on-line courses and information sites via its virtual Small Business Classroom. E-Small Business is designed to help small business take advantage of e-commerce opportunities to be competitive in the new digital economy.

Rural economic development: USDA’s Rural Business-Cooperative Service (RBS) pursues a number of activities to encourage business development in the rural Delta. The Business and Industry (B&I) Guaranteed Loan Program helps create jobs and stimulate rural economies by providing financial backing for businesses. Similarly, the Intermediary Lending Program provides loans to intermediaries, which in turn provide direct loans to recipients that develop business facilities or community development projects. The Rural Business Enterprise Grant Program assists public bodies, nonprofit corporations, and Federally recognized Indian Tribal groups for development of small and emerging private business enterprises. Another major rural development engine is the Rural Economic Development Loan and Grant Program that financed economic development and job creation projects, based on sound economic plans. In the fiscal years from 1993 to 1998 in the 219 counties of the region, these Rural Business Service programs provided a total of $245,128,336 in loans and $28,702,124 in grants.

Rural Development (RD): Rural Development programs must be supported and expanded for the vast rural Delta. For two of these programs, funding should be allocated as requested in the FY 2001 President’s budget to help build capacity in distressed and disadvantaged areas of the Delta.

• Under the Rural Business Opportunity Grant (RBOG) program, the President requests that at least 25 percent of the funding be used to support distressed communities in the Delta.

• Under the Rural Community Development Initiative (or RCDI, administered by the Rural Housing Service), a percentage of the funding should be allocated to support efforts in the Delta (as long as those needs are greater than other areas of the country) to develop the capacity of private, nonprofit community-based housing and community development organizations, as well as low-income rural communities to undertake projects for improved housing, community facilities and economic development projects. The funding would be made available to qualified private and public (including tribal) intermediary organizations proposing to carry out programs of technical assistance. Such organizations would provide matching funds from other sources in an amount equal to funding provided from the RCDI.

Department of Commerce programs: The Department of Commerce has been active in the Delta, especially in regard to its infrastructure, planning, technical assistance and business finance/revolving loan fund grants designed to stimulate economic growth and provide job opportunities. Commerce provided over $114 million in grants to the region during the FY 1993 to mid-FY 1999 period. Further attention should be directed to Commerce programs that promote minority business, telecommunications capabilities, and export assistance. Several important programs implement the Department’s responsibility for these issues:

• International Trade Administration Export Assistance Centers, Foreign Commercial Service Offices and Minority Business Development Agency Business Development Centers: The Department of Commerce, through its regional and district offices, will increase its outreach to the Mississippi Delta through technical assistance and management and export counseling. We will continue to work with our State and local partners to develop strategic approaches to increase economic prosperity in the region and its communities.

National Telecommunications and Information Administration - TIIAP programs: The Department will continue to work with communities and State and local organizations in their efforts to bring technological innovation and information to inner city and rural communities. Through the TIIAP program, communities receive funding for programs and initiatives that address the technology and information needs of a community.

Economic Development Administration Grant Programs: The Department’s Economic Development Representatives (EDR) throughout the Mississippi Delta region will continue working closely with State and local organizations to provide guidance and support in their efforts to develop comprehensive and strategic economic development plans, and provide information and assistance to distressed communities and organizations interested in applying for Federal financial support. To enhance service delivery, EDRs travel throughout their respective States to provide information and assistance to eligible communities and organizations and to help coordinate requests for technical assistance with EDA-funded university centers, planning and development districts and other Federal agencies that administer community and economic development programs. Currently, EDA has six EDRs that cover the seven-States that comprise the Lower Mississippi Delta.

EDA University Centers: University Centers are staffed by economic development researchers and specialists at the universities who bring their knowledge and expertise to smaller communities in the Delta region. EDA sponsors a network of six University Centers in the Delta: Those centers are: Mississippi Valley State University, Itta Bena, Mississippi; University of Memphis, Memphis, Tennessee; Xavier University, Orleans, Louisiana; Arkansas State University, Jonesboro, Arkansas; University of Arkansas at Little Rock, Arkansas; and University of New Orleans, Louisiana.

University Center grants are typically awarded financial assistance for a twelve-month period and are renewed if performance is satisfactory and funds are available. The typical Federal share of funding for a University Center ranges from $75,000 to $120,000.

University Centers provide the most up-to-date technology and information regarding economic development to outlying and smaller communities throughout the Delta. Through the University Centers, local leaders learn about innovative ways to use the latest economic information to plan for the future and create jobs for their communities. The majority of University Centers direct their efforts to assisting units of local government and nonprofit organizations in planning and implementing sustainable economic development programs and projects.

Planning and development districts: EDA also funds a network of local economic development districts throughout the region. Twenty-nine multi-county districts are located in the Delta and they blanket the State and help communities develop and implement comprehensive economic development strategies and projects that will create local employment opportunities and increase incomes for area residents. Examples include basic water and sewer infrastructure, skill-training facilities, port and harbor improvements, incubator buildings, military base re-use, redevelopment of brownfields, and the construction of new business and industrial parks. They also help communities and businesses that have been hit by disasters such as floods and tornadoes by developing recovery strategies and capitalizing revolving loan funds to rebuild their businesses.

Economic Development Administration Investments for the Arkansas Delta

During the Clinton Administration, EDA has funded 391 projects totaling $114 million in financial assistance for projects located in the Delta region from FY 1993 to FY 1999. EDA’s program has provided support to the region for 30 years. Projects from the Arkansas Delta area are discussed below to give specific examples of EDA investments. EDA funded 35 projects in the Arkansas Delta region. The funding for these projects totaled approximately $24.1 million. EDA’s support leveraged an additional amount of about $13.6 million in local funding for these projects, for a total projects cost of more than $37 million.

Blytheville and Gosnell received substantial funding, primarily in response to the Eaker Air Force Base closure in 1992. To date, EDA has invested $8.4 million in defense-adjustment grants to facilitate the transformation of the local economy away from its traditional emphasis on the base. These projects emphasize a more diverse approach as laid out in their EDA-funded strategic plan.

The single largest project funded was for $2.55 million in FY 1995 to the Blytheville-Gosnell Regional Airport Authority. This project financed airstrip upgrades and the renovation of hangars on the former Air Force base and enlarged them, permitting the hangars to accommodate larger planes. These improvements allowed Leading Edge Aviation, an airline painting company, to expand its business to larger planes and bring additional jobs and revenue to the area.

Facilities had to be configured to fit commercial specifications. Roads to these facilities needed to be built. Water and wastewater services needed to be expanded and upgraded to accommodate increased demand. Today the former base is now home to several large companies, such as Leading Edge Aviation, which employs 150 people. It is also one of the largest hubs for U.S. Postal Service mail-sorting operations during the Christmas season, employing 700 people. There are numerous small- to medium-size businesses as well which help to diversify and strengthen the local economy. A public works grant of $1.2 million to the Blytheville-Gosnell Regional Airport Authority will help to create 350 new jobs and retain 850 employees at the airport.

In addition to the U.S. Postal Service use of the former base for mail sorting operations, it shares the facility with Leading Edge, the largest aviation painting company in America, whose clients include NASA, Northwest Airlines, Continental UPS and U.S. Airways. Leading Edge’s employment is expected to grow from 150 employees to 500. More hangar space is needed to keep these companies in Mississippi County, which has lost over 700 jobs in numerous industries. Furthermore, the area steel mills—which employ hundreds of people—have to cut back costs to compete with cheaper steel imports. EDA’s $1.2 million grant will help finance a 35,000-square foot facility for the mail sorting operation that can also accommodate future alternate uses. The Airport Authority and the local community, which has had to invest in basic infrastructure and to respond to the crisis in the steel industry, did not have the funds to support the cost of this facility. The expansion would not be possible without EDA’s grant.

These EDA projects in the Arkansas Delta exemplify the types of work EDA is pursuing throughout the seven-state, 219-county region in a broad array of economic development and infrastructure development activities.

Economic adjustment in base closures and military downsizing: A number of communities in the Delta have been faced with the challenge and costs of adjusting local economies to base closures and other impacts of military downsizing. On October 5, 1999, the President signed the National Defense Authorization Act for fiscal year 2000 into law. An important provision of this legislation authorizes the Secretary to convey surplus base closure property to communities at no cost to stimulate economic redevelopment and long-term job creation. The President said: “This new policy…will allow us to speed the transfer of such property to local communities and minimize the time that the property lies fallow. In this way, we can give an economic jump start to affected communities and help to stimulate the investments necessary to attract new job-creating businesses.”

Significant community infrastructure investment is required to revitalize those areas adversely affected by base closings. Transferring property from these bases at no cost relieves these communities of the requirement to pay the military for the property, thereby freeing up revenue to more rapidly overcome obstacles. These revenues can be leveraged with private sector investment and other Federal agency programs. DOD’s Economic Adjustment Program provides technical and financial resources to assist an impacted community on reuse of a former military base. The Office of Economic Adjustment facilitates the Department’s support for these areas and coordinates the delivery of Federal interagency assistance in support of local community implementation efforts.

DOD has issued interim policies to implement this new legislation, conducting public outreach sessions to understand current and revised regulations and guidance in the form of the Base Reuse Implementation Manual, and to ensure a streamlined, responsive program for community-based job creation initiatives.

The following are numbers (through 1999) with respect to job loss and Federal financial assistance for four military installations in the Delta region affected by downsizing and closure:

1. Eaker Air Force Base, in Mississippi County, Arkansas; 3,300 acres, closed in 1992; 777 civilian jobs lost. All airport-related land will be conveyed to local authorities, and to date 603 jobs have been created. Federal financial assistance from DoD, FAA, and the Department of Commerce totaled approximately $4.7 million.

2. England Air Force base in central Louisiana closed in 1992, and in its place was developed a commercial regional airport, promising to become one of the most successful community-based redevelopment efforts in the country; it boasts 55 new tenants and 1,500 new jobs. Federal funding has been over $14 million.

3. Naval Air Station Memphis is located 16 miles north of Memphis in Millington, Tennessee. It was “realigned” in 1995, closing the airfield and causing 250 civilian jobs to be lost. The transfer of property and airport facilities is currently underway; 40 new jobs have been created thus far. Federal financial assistance has amounted to $2 million.

4. Defense Distribution Depot, Memphis is located two miles from the Memphis International Airport. It closed in 1995, with a civilian job loss of 1,289. At the present time the city of Memphis is negotiating with the Army to take title to the facility. Federal financial assistance has been approximately $ 3.7 million.

Recommendation regarding economic adjustment policies

The Federal government must continue to support the Department of Defense’s Economic Adjustment Program into the new century, as well as other policies pursued during the Clinton Administration aimed at helping communities transition economically and socially in the aftermath of base closures and military downsizing.

JOB TRAINING, WELFARE-TO-WORK, AND WORKFORCE INVESTMENT

Job training: The 1990 LMDDC Report emphasized, “Even entry level positions now require advanced skills attainment,” and called for access to the most comprehensive job training programs possible. The U.S. Department of Labor has promoted a series of job training and welfare-to-work projects summarized in this section. President Clinton signed the Balanced Budget Act of 1997 and the Workforce Investment Act (WIA) of 1998, two major pieces of legislation that will have a major impact on achieving this goal.

Welfare-to-Work: Moving people from welfare to work is now one of the primary goals of Federal welfare policy. The Balanced Budget Act of 1997, signed by the President on August 5, helps to achieve that goal by authorizing the U.S. Department of Labor to provide WelfaretoWork Grants to States and local communities to create additional training for the hardesttoemploy recipients of Temporary Assistance for Needy Families (TANF), and for low-income fathers. This program is helping Americans make the transition from welfare and dependency to work and self-sufficiency.

In order to receive formula funds under the Welfare-to-Work program, a State must submit a plan to the Department of Labor for the administration of a grant. After the Department determines that the plan meets statutory requirements, States administer the formula funds and assure they are coordinated with funds spent under the TANF block grant. Generally, private industry councils established under the Job Training Partnership Act (or, under the WIA, workforce investment boards) administer the program at the local level in coordination with elected officials. Funds allocated to States are based on a formula that equally considers States’ shares of the national number of poor individuals and adult recipients of TANF assistance. A State is allowed to retain 15 percent of the money for welfare-to-work projects of its choice. For every two dollars of Federal funding, States provide one dollar of non-Federal funding.

Under this program, the 25 percent of funds not allocated by formula are available for competitive grants awarded by the Secretary of Labor directly to local governments, private industry councils, community development corporations, community action agencies, and other private organizations that apply in conjunction with a private industry council or local government.

Formula funding for the Delta: By 1998, substantial Federal Welfare-to-Work formula allocations were devoted to the Delta. The 45 Delta parishes of Louisiana received over $15 million in 1998. The Service Delivery Area (SDA) including Cross, Phillips, Crittenden, St. Francis, and Lee counties in east Arkansas received more than $1.4 million, while the Southeastern SDA including Grant, Arkansas, Lincoln, Bradley, Ashley, Desha, Jefferson, Cleveland, Drew, and Chicot received over $1.25 million. Central Arkansas’ largest county, Pulaski, as well as Prairie, Monroe, and Lonoke counties, received $826,311. The northeastern Arkansas SDA received over $750,000. Mississippi did not submit State Welfare-to-Work plans in either 1998 or 1999. The DOT Delta Website contains an in-depth analysis of statistics on each local area in the region.

Competitive Welfare-to-Work grants in the region: Under the competitive grant part of the program, several projects were awarded in the region. These included a $5 million project for the New Orleans Welfare-to-Work Collaborative, an organization comprised of more than 60 businesses, service providers and consumer representatives. This project emphasized pay for performance and family self-sufficiency, and addressed a community in the central city of New Orleans facing a shortage of low-skill jobs that pay a wage sufficient to sustain a family. A similar $5 million competitive grant was awarded to Little Rock for an innovative project that focuses on a one-stop center anchoring employment and support services. A “whole family” approach includes job placement, employment education and training, substance abuse treatment, assignment of a personal mentor/job coach to assist with job retention, child care and transportation assistance, and help in locating housing.

Although Mississippi did not submit a State plan and thus did not take part in the formula funding for Welfare-to-Work, Hinds County, Mississippi did receive a $3,294,191 award under the competitive grant part of the program. The target community includes an area of Jackson, Mississippi that historically suffers from high poverty. The project aims to address the same fundamental problems as do the New Orleans and Little Rock plans: inadequate education, poor work histories, substance abuse, inadequate transportation and child care, and inadequate job skills. The goal of the Remedial Employment Opportunity Program (REOP) is to match new workers and their need for economic self-sufficiency to area employers. Local substance abuse treatment centers, housing and other community organizations will work with private employers.

Workforce Investment Act of 1998. On August 7, 1998, President Clinton signed the Workforce Investment Act (WIA) of 1998. This new authority overhauls the job training system by repealing the Job Training Partnership Act (effective June 30, 2000) and by bringing together many Federal, State and local partners into a comprehensive “one-stop” service delivery system. It is a customer-driven overhaul that will help employers get the workers they need to succeed in the 21st Century.

Annually, the Department of Labor allots, by formula, Federal job training funds to the seven States of the Lower Mississippi Delta region. These funds may be used to provide a wide array of services based upon individual need for low-income adults and youth, welfare recipients, and dislocated workers. Governors, in turn, allocate the funds to local communities where decisions are made on who will be served from among the eligible population, and how the funds will be used to help or qualify individuals find new jobs or first jobs. State and local officials have significant flexibility regarding how these funds are used and they generally make decisions based upon the population being served and the needs of the local communities. In addition, one-stop delivery systems have been developed throughout the Delta, where access to America’s Job Bank and America’s Talent Bank is available to all job seekers. Approximately twenty Job Corps Centers also are located in the region, with more than 10,000 youth receiving residential basic and vocational training annually.

The Welfare-to-Work and workforce investment reforms are relatively new programs, and thus data on their effects are not yet complete. The gradual increases in job growth and reduction in welfare rolls are moving in the right direction. The Welfare-to-Work programs provide innovative new approaches to the old problems of ending the debilitating cycle of dependency and unemployment, and these innovations are important to build on in the new century.

Job Training, Welfare-to-Work, and WIA Goals and Recommendations

It is essential that the progress achieved thus far in the Delta through the training, Welfare-to-Work and workforce development policies should be continued and broadened in the years beyond 2000. The Workforce Investment Act (WIA) seeks to reform Federal employment and training programs, and creates a new, comprehensive workforce investment system. Designed to meet the needs of both employer and job seeker customers, the goal of WIA is to increase the employment, retention, and earnings of participants, and increase occupational skills of participants. In achieving these goals, the new system will improve the quality of the workforce to sustain America’s economic growth, enhance the productivity and competitiveness of the nation, and reduce welfare dependency.

Welfare-to-Work Plans: In order for States to receive the full value and benefits of Welfare-to-Work programs and policies, it is important to work closely with them on the development and completion of tailored plans.

Work Investment Boards and “One-Stop” Centers: The Workforce Investment Act consolidates several job training programs. In doing so, States and local areas are mandated to establish Workforce Investment Boards (WIBs). Appointed by local elected officials, in accordance with criteria established by the Governors, local WIBs must have a majority of business representatives and must also include representatives of education providers, labor organizations, community-based organizations (CBOs), economic development agencies, and each of the “One-Stop” partners. In order to gain access to Federal funding, these boards must submit a 5-year plan to the U.S. Department of Labor.

The cornerstone of this new system is streamlined service delivery. By building on One-Stop implementation efforts already underway in the vast majority of States, this integrated system will simplify and expand access to services for job seekers and employers. One-Stop Centers are mandated to coordinate activities and create systems of seamless service delivery. Executed properly, this plan will ensure that all entities work together to provide education and training that prepares employees for jobs in the local labor market and connects employers with skilled workers.

The Lower Mississippi Delta initiative affords Federal agencies an excellent opportunity to assist the people within the Delta. The broadest possible participation by our State and local partners, stakeholders, Federal agencies, and other interested organizations and individuals is essential in planning and implementing the Act both in the Delta region and across the country. Provisions in the bill ensure that all levels of government will be held accountable for results. The bill provides core measures of performance, including job placement, retention, and earnings that will apply to States and local areas.

Integrated service delivery: Economic conditions of the Delta depend on good service readily available to the public. True integration of Federal departmental services will be essential if this five-year plan is to be effective. An excellent example of integration is the Department of Transportation’s—joined by other departments and agencies in this effort—assistance to local communities to help inner city residents get to outlying jobs.

WIA supports integration of agency services within the mandated five-year plan. It must be more than a sketch for job training. States are mandated to examine all facets of integration—transportation, vocational education, job creation, and economic expansion—keeping in mind that all must be supported by a skilled workforce. We must make stakeholders aware of available resources, such as America’s Job Bank, America’s Labor Market Information, and others. The Federal government’s Office of Personnel Management maintains USAJOBS website, which is a constantly updated listing of every Federal job vacancy currently available and can be accessed according to location as well as type of work. It has links to the Department of Labor’s job bank and State unemployment agency sites. The website address is www.opm.gov/usajobs.

At the same time, we must teach and encourage use of these programs. We must work directly with industries to provide a competent workforce armed with the skills needed for specific jobs.

Training for welfare workers: States and communities could use their Temporary Assistance to Needy Families (TANF) funds to increase training for the staff who are helping families move from welfare to work. Through the Temporary Assistance for Needy Families program, States, territories, and tribes each receive a block grant allocation. A total allocation of $1.5 billion in block grants will be available for the seven States within the Mississippi Delta region.

Education and training for Temporary Assistance to Needy Families (TANF): There is a need to increase access to education, training and employment programs, provide supportive services to remove barriers and help low-income adults move into work and move up the career ladder. Under the Temporary Assistance for Needy Families program, States, territories, and tribes each receive a block grant allocation. The total block grant is $16.5 billion each year through FY 2002. The block grant covers benefits and administrative expenses, as well as a wide range of services. States, territories, and tribes determine eligibility and benefit levels and services provided to needy families. Federal, State and local agencies, in collaboration with faith-based organizations and private sector entities, should utilize TANF flexibility and resources to ensure low-income families have access to programs to improve their skills and move up the career ladder.

Providing workforce development support to small businesses in the Delta region: Through the Welfare-to-Work and Disability Initiatives, the Small Business Administration will provide technical assistance and resource information to local businesses in the Delta in need of workers. SBA will help link businesses to local service providers and other organizations that provide job training and placement of persons on welfare. In addition, SBA will continue its efforts to provide information to businesses on tax credits, wage subsidies and other incentives offered at the Federal and State level for companies that hire people from welfare.

COMMUNITY DEVELOPMENT

The Clinton-Gore Administration has supported major policy initiatives and programs that emphasize leadership at the grassroots level, community partnerships, and long-term strategic planning as the entry points for community and economic revitalization, and development. These policies are exemplified by the Empowerment Zones/Enterprise Communities (EZ/EC) program, the Community Development Financial Institutions Program, and related community development innovations discussed below.

Empowerment Zones/Enterprise Communities (EZ/EC) and Champion Communities: The EZ/EC program is the major Clinton-Gore Administration innovation in the field of community development. The EZ/EC program emphasizes a comprehensive approach to community revitalization and improvement that encompasses economic development as well as a range of “quality of life” issues such as education, housing, health care, infrastructure, and other issues. It is perhaps the most innovative and wide-ranging of the array of development initiatives discussed in this Report, since it is based on inter-related activities involving transportation, job creation, health care, education, infrastructure, small business development, and other areas analyzed in all sections of the 1990 Report, The Delta Initiatives.

In Round I of the EZ/EC program announced in 1994, there were eight rural and five urban EZs and ECs in the Delta. Another rural Delta EZ (in southern Illinois) was added in Round II of the program in 1999. The urban Enterprise Communities are in Pulaski County, Arkansas; Ouachita Parish, Louisiana; New Orleans, Louisiana; Memphis, Tennessee; and Jackson, Mississippi. The rural EZs and ECs are as follows: the Mid-Delta Mississippi Empowerment Zone, Mississippi; North Delta Mississippi EC, Mississippi; Northeast Louisiana Delta EC, Louisiana; Macon Ridge EC, Louisiana; Mississippi County EC, Arkansas; East Central Arkansas EC; Fayette/Howard EC, Tennessee; East Prairie EC, Missouri; and the Southernmost Illinois Delta Empowerment Zone, Illinois. The program is based upon the principles of sustainable development, economic opportunity, grassroots leadership, long-range strategic planning and collaborative problem solving, and community-based partnerships.

Nationally, Round I rural EZs received Health and Human Services block grants totaling $40 million, while ECs received funding of $3 million. EZ employers gained tax credits equal to 20 percent of the first $15,000 in wages or training expenses for qualified employees. Tax-free facility bonds of up to $3 million were available for some EZs and ECs. Qualified businesses could receive an additional $20,000 tax deduction for investments in EZs. Communities also received priority consideration for many other Federal programs.

A new initiative that developed in tandem with the EZ/EC program within USDA’s Rural Development was that of Champion Communities. In order to be considered for EZ/ECs, communities organized and completed the valuable strategic planning process as part of their application for Round I EZ/ECs. To assure that this effort produced continuing benefits to these communities, USDA designated them as “Champion Communities” and provided continuing assistance to them.

However, the grassroots leadership and strategic planning phases of the program are more important, ultimately, than the Federal funding amounts. One of the great successes of the program has been the communities’ success in “leveraging” funds. For example, the rural communities drew $10.225 million from their EZ/EC funding from 1994 to the beginning of 1999, while their total funding—including State, local, private business, and nonprofit foundation sources—amounted to ten times that much, or approximately $107.4 million. The EZs and ECs provide a model for grassroots community leadership and sustainable development.

The Round II EZs designated in January 1999 (of which the Southernmost Illinois Delta Empowerment Zone is one) received first-year funding of $2 million. The Administration is seeking full 10-year funding for these designated communities.

As Vice President Gore indicated in his statement for Delta Vision, Delta Voices, “The EZ/EC program embodies what the Delta initiative is all about; it is based upon the principles of sustainable development, leadership from the grassroots level, economic opportunity, long-range strategic planning and community-based partnerships.” In light of the Vice President’s statement and the importance of this program as a model for local initiatives, the following examples provide a sampling of EZ/EC activities. These reflect the types of grassroots community development generated by this program, and they demonstrate examples of action that should continue in the new millennium.

Community Housing Efforts

Housing revitalization in Mississippi County: The Mississippi County, Arkansas EC developed and implemented a comprehensive plan for affordable housing development and community improvement in Mississippi County. The plan coordinates efforts to achieve affordable home ownership, rental opportunities, and community improvement projects. To address the problem of a lack of information about credit and housing opportunities, the EC implemented a credit repair counseling and home ownership training program. Since its inception, 70 families have participated in this counseling program. The EC area has suffered from deteriorating housing stock that has lowered the standard of living for many low-income families. In response, the EC created a preservation and rehabilitation program for owner-occupied units. The EC surpassed its original goal of rehabilitating 20 housing units and now has rehabilitated 43 homes. The EC has also focused on creating affordable, clean, decent rental units for low-income residents. The EC has constructed 57 new rental houses for families, surpassing its original goal of 20 new homes.

Partnerships with nonprofit grassroots organizations: The North Delta Mississippi EC has developed an effective collaboration with Tallahatchie Development League (TDL), a nonprofit, grassroots organization that promotes community development in “education, economics, and family life.” TDL is a partner in the ECs Housing Preservation Grant Program. In partnership with the North Delta Area on Agency, TDL offers 27 meals per day to senior citizens in the Tutwiler community. The League has co-developed 72 units of housing within the EC. TDL also provides consulting services to communities and other nonprofits in preparing applications for housing, Rural Development Section 515 programs, the Affordable Housing Program, and community development block grant funding.

Community Health Care

Delta Futures project for reducing infant mortality and teen pregnancy: This Federally funded “Delta Futures Safe at Home Project” provides a series of services in nutrition, the Women, Infants, and Children (WIC) supplemental nutrition program, health information and education about the dangers of tobacco. The North Delta Mississippi EC partners with a consortium of health care providers, schools, Head Start, businesses, and community-based organizations that contribute solutions to the fight against low birth weight and infant mortality.

Nursing Assistants Program: The Northeast Louisiana Delta EC sponsored a Nursing Assistants program at the Louisiana Technical College’s Tallulah campus. Students are enrolled dually in high school and the nursing assistants program, which enables them to become certified nursing assistants who can go to work immediately after graduation. In 1998, 37 students enrolled in two classes in Tallulah and 20 enrolled in a class in Lake Providence. Last year, 22 students graduated from the program. The program is an excellent preparation for students considering a job in the health care industry.

Infrastructure

Macon Ridge, Louisiana infrastructure development: Numerous examples of infrastructure development took place in 1998 in the Macon Ridge Enterprise Community, which received a series of infrastructure improvements through USDA Rural Development funding. The following are several prominent examples:

• Turkey Creek Water System received a grant amount of $1,815,000 and a loan of $695,000 for the construction of a rural water distribution system, including water production wells, elevated storage tank, distribution lines and service connections for approximately 400 households in Franklin Parish.

• In Ferriday, Louisiana, a Rural Business Enterprise Grant of $225,000 was used to acquire the land and building for the Macon Ridge Enterprise Community Resource Center.

• In Harrisonburg, a $250,000 grant and $200,000 loan was used to construct a new wastewater treatment facility.

• For the Concordia Parish Water District, a $1.294 million grant and $482,000 loan upgraded a water system that had been inadequate by constructing three new water wells, four exchange units, a new metal building and a 200,000-gallon potable water storage tank.

• In the towns of Wisner, Newellton, and St. Joseph, and Catahoula Parish, USDA Community Facilities grants were used for improvements to fire and police department equipment.

Railroad improvements to Tennessee industrial park: The Fayette/Haywood County EC solved a major transportation problem for the Haywood County industrial park in Brownsville, Tennessee. The industrial park had been filling up and there were almost no sites remaining with railroad access. The EC applied for a $600,000 USDA Rural Development grant and started laying a railroad spur to the underserved area of the park. A Fortune 500 company got in touch with the park just as the spur was being constructed, ultimately resulting in the opening of a $20 million high-tech papermaking plant employing 35 people. The USDA funding was essential to the project, which came in under budget, in turn enabling a second spur to be built that will encourage more firms to locate at the Brownsville park.

Telecommunications: The Fayette County/Haywood County EC is working with local and State partners to promote a State-of-the-art community telecommunications center for workforce development. The Fayette County School Board is creating a Telecommunications and Business School that will be equipped with computers and Internet access. The EC developed a strategy to establish job training programs relevant to the needs of local and regional markets. Local and State officials, Shelby State Community College, and Rural Development are all cooperating in this joint effort to enhance telecommunications in the local area.

Community Small Business Development

Historically Black Colleges and Universities grant for business incubator: The Northeast Louisiana Delta Community Development Corporation worked with Grambling State University to obtain a grant from the U.S. Department of Health and Human Services (HHS) to develop a business incubator for new and emerging micro-businesses. The grant was awarded through the Office of Community Services’ Historically Black Colleges and Universities. This project will provide economic opportunities and promote self-sufficiency for low-income residents of the area.

North Delta revolving loan fund for small businesses: The North Delta EC has funded 19 small businesses from its revolving loan fund. Each loan was in the amount of $10,000. The businesses provide job opportunities and entrepreneurial opportunities for local residents. The ECs vision for a business revolving loan fund (RLF) became a reality for Quitman County, as the EC Board approved Quitman County Economic Development District as administrator for the RLF. In 1998, the business plan application process led to 15 loans, 88 percent of which were made to minorities. The total amount loaned was $166,300, which was used for a variety of purposes from business expansion or purchasing equipment to inventory replenishments for existing businesses. One third of the $250,000 available was set aside for businesses going into the new business incubator located in Lambert, which will be in operation by the fall of 1999. An additional EC initiative is a new Community Training Institute, which will provide training in budgeting, grant writing, credit repair, and other issues of interest to EC residents.

Community Education and Training

Little Rock preschool program: In the Pulaski County/Little Rock, Arkansas EC, the “Success by Six” program is creating a community where children have the necessary skills to enter school ready and able to learn. The EC is partnering with 10 State and local entities and a steering committee representing more than 50 individuals or organizations. “Success by Six” features home visits by volunteer neighborhood residents who are trained as family resource advocates. For families with pregnant women or children under 6 years old, home visitors conduct assessments, determine household needs, and connect family members to community resources such as health care, social services, and educational programs. The program is working with roughly 20 families. Approximately 10 home visitors have been trained, with many more submitting applications to take part. Research has demonstrated that by reaching out to families when children are in their earliest formative stages, serious problems can be avoided in the future and less funds will be expended upon remedial education, health care, or other social costs.

New Orleans Safe Harbor Schools Initiative: The New Orleans EC created a “Safe Harbor Schools” initiative for educational activities in 10 sites within the community. Now in its fourth year of operation, the program is moving beyond basic survival skills to include creative learning experiences in language, arts and math. Safe Harbor Schools offered tutoring programs and enrichment activities presented by certified teachers. Offerings included computer skills and family learning events, as well as classes in conflict resolution and mediation. Four of the Safe Harbor sites are for middle and high school students. In the Algiers community, the program is focusing on out-of-school populations due to a high truancy and dropout rate, with GED preparation and career counseling being offered to 50 EC youths and students. Progress has been made in keeping students motivated by use of the computer lab and job training center, and through contact with the school’s numerous partners. The project has been a success for many young people who completed their GED and job training.

Job Creation and Retention

Job creation and/or retention at Macon Ridge EC: By early 1998, the Macon Ridge Louisiana EC summarized its record regarding jobs: a total of $953,000 was loaned, with leveraging of private funds adding up to $787,000. A total of 118 minority jobs were created or retained, with 111 jobs held by women. The EC reported 25 minority-owned businesses and 20 businesses owned by women participating in the program.

Northeast Louisiana Delta job creation projects: Avondale Industries, the sixth largest shipbuilding firm in the country, placed an expansion site in Tallulah, Louisiana, in the Northeast Louisiana Delta Enterprise Community. Moses Williams, president of the Northeast Louisiana Community Development Corporation, said the Avondale success story was part of job creation initiatives in Madison Parish during the 1990s that led to a decrease in unemployment from 14 percent in 1993 to 7.5 percent in June 1999. “That’s the lowest unemployment we’ve had here in 20 years,” said Williams.

In letters to Avondale, Williams and Tallulah Mayor Theodore Lindsey pointed out Tallulah’s other advantages: It already had a port facility on the Mississippi and a trained labor force of welders who were ready to work. When Avondale executives showed interest in Tallulah’s port facility, State and local officials got involved to induce the company to make its move. Avondale invested $2 million to renovate an existing building on the port. The Louisiana Legislature contributed $1.3 million to make infrastructure improvements so the port could accommodate Avondale’s operation. The company qualified for Federal and State tax credits.

Avondale expects to increase its workforce to 200 by the end of 1999. The new jobs are a welcome shot in the arm for an area where unemployment has historically been twice the State average. Those jobs may be just the beginning of economic development success for Tallulah, as the shipbuilding operation attracts other business to the city. Not long after receiving a firm commitment from Avondale, the local Enterprise Community lent $118,000 to a sewing company (called LAPCO) that specializes in making jackets for welders. Intrigued by the possibility of selling its product directly to the shipbuilder, LAPCO leased a vacant, city-owned building and used its EC loan to purchase factory equipment. LAPCO, which opened its Tallulah plant in August 1998, will employ 50 to 100 local residents.

That Tallulah managed to recruit a large corporation to bring in a plant locally does not mean that other communities could follow this pattern, or that the success of this project came from outside the community. To the contrary, the key elements of success behind this project came from within the community itself: the skilled labor, the technical college, the port facility, the local ingenuity, and above all the cooperation and leadership of the people in Tallulah. The collaboration of local leaders with Federal, State, and private entities in these successful projects provides a good model for communities to emulate in job creation and business development.

Job Creation in the Delta—Mid-Delta Mississippi Empowerment Zone

Dollar General Distribution Center, Indianola, Mississippi—creating more than 500 jobs:

The Mid-Delta Empowerment Zone Alliance (MDEZA) played a vital role in helping secure a major facility for the Mississippi Delta—Dollar General’s Distribution Center in Indianola, Mississippi, leading to the creation of 500 new jobs. Just 10 months and a day after announcing construction in August 1997, Dollar General Distribution Center shipped the first order.

The Company made the official announcement that it would construct its Distribution Center in Indianola Mississippi on August 28,1997. Groundbreaking ceremonies for the 825,000-square-foot automated distribution facility took place on October 7, 1997. The first inbound shipment arrived May 18, 1998 and the first outbound shipment of goods occurred June 29, 1998.

MDEZA invested $900,000 in infrastructure for the new distribution center, leading to a major success in leveraging MDEZA funds—the project has brought in a total of over $38 million in public and private investments. In addition to the new jobs created (cited above) this project has also created 150 truck drivers who ship products to 370 Dollar General stores throughout the region. Dollar General CEO Cal Turner, Jr. says the company chose Indianola because of the “total community support” for the company. The EZ tax credits provide up to $3,000 for every resident of the Zone that is hired by Dollar General.

Many of the workers in this automated distribution center reside in the Mid-Delta Empowerment Zone. MDEZA was also instrumental in leveraging a $900,000 infrastructure grant to the City of Indianola thereby assuring construction of the $30 million facility and over 500 new jobs for the region.

Henry Gardner and Clara Brown are two individual success stories who illustrate the impact of this project on lives of the people. Mr. Gardner, 41, had been a farm worker who received low wages before he went to work for Dollar General. He previously did not have health or retirement benefits. Now he says, “Dollar General offered me a place to work where there are nice people to work for…. The benefits and money help my family… Since I have been employed here I can now pay my bills.”

Clara Brown is another success story. A 48-year-old single parent, she says, “Dollar General gave me the opportunity to keep my home. My mother died and I did not know which way to turn. Dollar General gives me the money I need to provide for my kids so they do not have to do without the things they need.” Ms. Brown previously held lower-paying jobs, and she says, “I enjoy my job now and feel good about myself.” Since going to work for Dollar General she has been able to buy a car, and she said, “I have even bought my son a computer and can pay all my bills.”

On average there are 115 shipments per day in and out of the Center. New truck lanes are under construction on Highway 82 to safely accommodate this additional traffic. MDEZA has been able to leverage its funds three-fold. For every MDEZA dollar spent, it has acquired three in return. The 42 contracts total $11,239,439 and MDEZA contributed only $2,752,430 for an advantage factor of 76%.

Business and Industry Loans for Catfish Processing, Itta Bena, Mississippi—Creating more than 400 jobs: The Mid-Delta Mississippi Empowerment Zone provided vital assistance in bringing a major catfish-processing facility into the EZ. USDA’s Rural Development provided a business and industry loan guarantee in the amount of $2.5 million to Freshwater Farms, a catfish-processing facility. That initial investment brought a facility to the EZ that has provided more than 236 jobs since the initial investment was made several years ago, and the business is still flourishing today. Heartland, Catfish, Inc. located a new catfish-processing facility in Itta Bena, Leflore County.

The catfish industry is an important new activity in Mississippi and in the Delta region as a whole, as it provides a major alternative to traditional row crop farming. The Heartland Catfish facility in Itta Bena is one success story in a statewide industry that now contributes in excess of $2 billion to Mississippi’s economy annually. Contract farming in aquaculture is rare, and the economic benefits of aquaculture accrue primarily to private citizens. For the Delta region, aquaculture provides a unique opportunity for employment and income for limited resource, small farmers—many of whom are minority—who might not otherwise be able to stay in business.

Thus, the foresight of the EZ and other community leaders led to the establishment of a major catfish plant in the EZ, and contributed to the growth of a major industry that has succeeded in diversifying and strengthening economic opportunity for the residents of the Empowerment Zone.

Community Development Goals and Recommendations

The Empowerment Zones/Enterprise Communities (EZ/EC) program in the Delta is an effective model for community development, based on the fundamental EZ/EC principles of leadership at the grassroots level, economic opportunity, sustainable development, strategic long-range planning, and community-based partnerships. The EZ/EC program has developed a strong collaboration with numerous other agencies, including SBA, USDA, HUD, HHS, DOT, Education, Treasury’s Community Development Financial Institutions (CDFI) program and others. This innovative collaboration should continue and expand in the future. The regional strategic plan of the Southern EZ/EC Forum is an excellent example of long-range vision for the Delta’s future development.

Expansion of EZ/EC program in the Delta: There are currently nine rural EZ/ECs and five urban ones, and this number should be expanded. As is the case with any program, there has been a range of accomplishment, and some communities have enjoyed more success than others. The President’s FY 2001 budget proposes mandatory funding for the remaining eight years for Round II Rural Empowerment Zones, as well as a third round of Empowerment Zones (eight urban and two rural EZs).

Enhancing Champion Communities: In order to enhance the benefits of Champion Community status, additional preference points in applying for Federal funding should continue to be given these communities, or other incentives should be developed to reward localities that have achieved this status and to encourage others to attain it. There should be funding for a new Center of Excellence to support Champion Communities in the Delta. There should also be funding for a returning Peace Corps member to provide technical support through the National Center of Excellence at Mississippi Valley State University.

Promoting Community Development Financial Institutions (CDFI): There needs to be a concerted effort to expand the availability of capital, investment capital, and financial services in distressed urban, rural and Native American communities in the Mississippi Delta region. The Federal government needs to encourage the development of locally based institutions in conjunction with traditional banks and thrifts to provide access to capital, investment capital, and expanded financial services via grants, other financial assistance, and technical assistance. Financial and technical assistance should be provided to Community Development Financial Institutions (CDFIs) that serve the Delta. CDFIs of a variety of types (microenterprise funds, credit unions, community loan funds and venture capital funds among them) should be encouraged to serve the credit and investment needs of the Delta.

In collaboration with the Department of Treasury, many communities have been assisted by initiatives of the CDFI Fund, which has provided extensive financial support for many community development organizations in local areas throughout the region. In President Clinton’s “New Markets Initiative” trip to Clarksdale, Mississippi, in July 1999, he announced nearly $15 million in new private investments in the Enterprise Corporation for the Delta, a nonprofit organization that uses investments from the CDFI Fund to leverage private investments in business. The President announced that the Bank of America would pledge $500 million in equity for business enterprises in low-income areas; of that total, $100 million will go into a Community Development Financial Institution (CDFI). The President said, “We are going to do everything we can in the government to give the financial incentives necessary for people to invest here.”

Changing Lives in the Delta—Enterprise Corporation of the Delta

During this historic period of economic expansion in the United States, there are communities that remain relatively untouched. To highlight the untapped economic potential of such communities, President Clinton launched his “New Markets Initiative” with a four-day trip to six communities in early July 1999. The President visited Clarksdale, Mississippi, where he saw firsthand the impact that can be made with private sector investments in the lower Mississippi Delta as illustrated by the work of the Enterprise Corporation of the Delta (ECD).

ECD is a non-profit loan fund that seeks to strengthen the rural Delta region of Mississippi, Arkansas and Louisiana by providing market-driven financial and technical assistance to Delta companies and entrepreneurs. This certified CDFI provides a much needed mechanism to attract private sector capital to support its job creation and economic development initiatives. ECD has been awarded a total of $4.5 million since 1996 through the CDFI Program. In addition, ECD has been able to raise from mainstream financial institutions a total of $5.325 million as a result of the Fund’s Bank Enterprise Award Program. “ECD has done a tremendous job using the CDFI Fund’s programs and providing a significant economic investment in the Delta, said CDFI Fund Director Ellen Lazar. “ECD is a wonderful model for how Federal dollars can be used to leverage private sector investments.”

Clinton toured Clarksdale’s depressed downtown and participated in a business roundtable at Waterfield, Inc., an ECD-financed cabinet manufacturer with 68 employees, one-third of which are former welfare recipients. One such employee is Cora Porter, assistant plant manager, who joined the President on stage but whose journey began sweeping the floors of Waterfield’s predecessor. Today, this proud grandmother of 13 handles personnel, ordering, distributing material and shift coordination. “Cora is an exceptional person,” said Waterfield owner Shelly Rice. “She is an innovative, hard working and loyal employee.”

Nearly 1,000 people braved the sweltering Delta heat to attend the roundtable discussion, which focused on the need for investment capital in the Delta region, examples of small businesses that are making a difference and the investment potential for corporate America. The President also announced nearly $15 million in new private sector investments in ECD.

“President Clinton’s message about the need for private support to develop the Delta’s tremendous assets is right on target,” said ECD’s Executive Director Bill Bynum. “ECD’s work would not be possible without strong partnerships with the region’s banks and corporations and the Federal government. More and more, people are realizing that working together to strengthen the Delta’s economy benefits everyone.”

The President praised ECD for its work in the Delta. “It is a real success story. Just since 1994, [ECD has provided] financial or technical assistance to more than 600 companies,” Clinton said. “Overall, ECD has helped to generate more than 5,000 jobs and $200 million in annual sales. The story needs to go out across America: this is a good investment. This is a good deal.”

Bank Enterprise Awards: There should be a continuing mechanism to encourage regulated banks and thrifts to provide the Delta region with access to credit and financial services both directly and through support and partnerships with CDFIs. The CDFI Fund Bank Enterprise Award (BEA) Program provides incentives to FDIC-insured institutions to increase their level of activity to underserved communities and CDFIs, including those serving the Delta. Numerous banks in the region have participated in the BEA Program.

Community Adjustment and Investment Program (CAIP): As the global economy becomes more competitive, many communities within the Delta region could be affected by changes in international trading patterns. In areas experiencing job displacement due to such changes in trade patterns, there should be a coordinated Federal effort to assist tradeaffected communities and companies in sustaining and creating jobs. This effort should encourage business development and job growth by providing technical assistance, grants, and financing in communities that lack access to affordable credit and need technical expertise. The assistance could include funding for job training programs, financing for a company’s purchase of equipment, and capital for business expansion. The Federal efforts should be coordinated with: the private and non-profit sectors, State and local authorities, community leaders, and community-based organizations. For example, the Community Adjustment and Investment Program (CAIP), administered by the North American Development Bank, provides loans, guarantees, grants and technical assistance to businesses and not-for-profit entities. The programs help create or retain jobs in communities experiencing job dislocations due to changing trade patterns with Canada and Mexico resulting from NAFTA.

Community Adjustment and Investment Program (CAIP)

Financing for Port Barre Apparel, Inc., Port Barre, Louisiana

The Community Adjustment and Investment Program (CAIP) is a valuable part of the commitment that the Clinton Administration made during negotiations on NAFTA. The CAIP’s mission is to help create and sustain jobs in U.S. communities experiencing temporary job dislocations attributable to changing trade patterns with Canada and Mexico associated with NAFTA. The CAIP exemplifies globalization with a human face by helping to provide worker training and finance assistance in communities affected by trade.

The CAIP is affiliated with the North American Development Bank, a bilateral financial institution established by the United States and Mexico. The CAIP provides financing to eligible communities, businesses and workers by: (1) making direct loans, (2) facilitating loan guarantees through agency programs with the Small Business Administration and United States Department of Agriculture, and (3) providing project and technical assistance grants. CAIP eligibility is based upon a number of factors, including unemployment statistics and NAFTA-related job losses.

The Port Barre, Louisiana Apparel, Inc., Loan

In the fall of 1999, a CAIP job creation project in Port Barre, Louisiana, was one of the local initiatives highlighted at a Delta 2000 Initiative listening session held at Southern University in Baton Rouge, Louisiana. Maria Matthews, Deputy Administrator of the USDA Office of Community Development, presented the opening speech at the session. Ms. Matthews cited the Port Barre project as an excellent model for dynamic job creation efforts in the Delta.

Deputy Administrator Matthews said that in September 1999, CAIP provided financial assistance to defray loan guarantee fees and facilitate a loan in the principal amount of $975,000 to Port Barre Apparel, Inc. of Port Barre, Louisiana, located in St. Landry’s Parish. The loan guarantee, combined with the borrower’s equity investment and a bank line of credit, will enable Port Barre Apparel to open a tee shirt cutting and sewing business in an old Fruit of the Loom manufacturing facility. The Fruit of the Loom plant was closed when operations were relocated to Mexico.

Many workers displaced by the Fruit of the Loom relocation are expected to be employed at the new Port Barre Apparel plant. According to the borrower, this new plant will have a competitive advantage by offering more efficient service than foreign suppliers due to its proximity to wholesale and retail customers.

Deputy Administrator Matthews, who previously was Executive Director of the Imperial County California Enterprise Community in southern California before becoming head of the USDA EZ/EC program in 1999, has been heavily involved in issues related to NAFTA for many years. She said the Port Barre project exemplifies CAIP’s mission in helping to create and sustain jobs in U.S. communities experiencing temporary job dislocations due to changing trade patterns associated with NAFTA. The Port Barre Apparel management team expects to create 85 new full-time jobs in its first year of operation and 130 jobs by the end of two years. Within five years, they project plant employment to reach 360 workers.

BusinessLINC: To strengthen business-to-business relationships that can provide smaller firms—especially those in economically distressed areas—with access to the broader marketplace, access to technical expertise, and access to business partnering opportunities, the Delta region should expand its nascent local BusinessLINC coalition. BusinessLINC stands for “Learning, Investment, Networking and Collaboration,” and was first launched in 1998 by Vice President Gore, former Treasury Secretary Rubin and SBA Administrator Aida Alvarez. The national coalition is led by the Business Roundtable and Texaco CEO Peter Bijur. Currently, local coalitions are forming in the Delta, Dallas, Boston, Chicago, New York City, and Washington, D.C., with more expected. The Department of Treasury, along with other agencies, will help the Delta BusinessLINC Coalition identify more large companies that would be willing to partner with small businesses to help these companies get access to capital, technical assistance, networking advice and joint venture opportunities.

Livable Communities: The activities of the Livable Communities initiative should be continued and expanded. This initiative, through activities at the U.S. Department Transportation and other Federal agencies and departments, promotes coordinated efforts to link State and local governments, and community groups. The Administration’s Circuit Rider Pilot Project, announced in December 1999, for the East Arkansas area is one such example. On a broad basis, the Federal government should undertake a more sustained coordinated approach to enhancing the ability of communities, the private sector, the non-profit sector, State and local officials, and community-based organizations to become more aware and to more easily access the vast array of Federal programs available to meet a wide variety of needs. This information should be available via the Internet and other mechanisms for those who do not have access to the Internet or who are disabled. An example of such an undertaking is the Building Livable Communities website which contains a wide variety of Federal programs available to assist communities with their efforts to enhance livability.

Grassroots development—the Delta’s Future

The particular projects summarized above represent only a small fraction of the accomplishments, but they demonstrate how communities are meeting and in many cases surpassing the program’s goals, leveraging resources and creating sustainable development. Ultimately, the success of these community development ideas—EZ/EC, BusinessLinc, CDFI, Livable Communities, and the other innovations discussed in this section—flow from men and women in the Delta communities who have demonstrated the commitment and hard work needed to make their vision of opportunity and revitalization become a reality.

THE FARM ECONOMY

“Once, many thousands of years ago, this flat Delta land was the very floor of the sea. Later it was covered with great swampy forests, and any person who wandered into them by himself would get very lonely and afraid; he would have to be wary of the quicksand, not to mention the giant lizards, snakes, alligators… Now it is the richest land in the world. Some say if you plant a cotton seed in it, you have to jump away quickly to avoid being hit by the growing stalk.”

The late Willie Morris, describing the great historic process whereby the nineteenth century Delta wilderness was transformed into what is today the most fertile farmland in the world.

Agriculture remains an economic juggernaut in the Delta. This region is one of America’s most prolific producers of cotton, rice, soybeans, and other major agricultural products. Agriculture affects not only farmers and farm laborers, but has a widespread impact throughout the region’s economy, since equipment dealers, banks, local stores, and many other businesses and individuals are affected by the fate of the farm economy. USDA pursued policies to promote the economic viability of the traditional major producers, as well as new initiatives intended to promote direct marketing, sustainable agriculture, alternative products such as aquaculture, and other policies aimed at preserving marketing and credit opportunities for small and minority farmers.

The 1990 Report recognized the major importance of the agricultural sector in the Delta. Adequate credit must be made available to high-risk farmers, and the Report generally emphasized the need for helping minority or limited-resource farmers who are troubled by small acreage and limited capital. The Commission urged more attention to direct marketing and other alternative marketing methods, and the development of sustainable agriculture. USDA, under Secretaries Mike Espy and Dan Glickman, inherited a problem of discrimination against minority farmers by USDA, and they have acknowledged the terrible plight of African-American farmers and how much remains to be done to alleviate this problem. The Secretaries changed policies at the Department and promoted greater attention to the problems of minority and limited resource farmers. USDA attempted to reverse policies of the past that had discriminated against small and minority farmers, and such programs as farm credit for socially disadvantaged farmers were expanded. In the Clinton Administration, USDA has devoted tremendous attention to the task of improving the plight of the small and minority farmer.

Marketing for minority and limited resource farmers: During the 1990s, USDA increased its efforts to promote farmers’ markets and other direct marketing initiatives to assist limited resource farmers. Secretary Dan Glickman pursued a series of objectives recommended by the National Commission on Small Farms in 1997-98, including promotion of better marketing for the roughly 94 percent of America’s farmers who are in the medium to small range in size.

USDA conducted a series of marketing feasibility studies, and other technical assistance was provided to farmers’ markets in the Delta. Marketing initiatives for aquaculture, for farmers seeking to change from tobacco to other crops, and other alternative agriculture projects were assisted. The Women, Infants and Children (WIC) Farmers’ Market Nutrition Program greatly expanded in scope from 1993 onwards. The WIC farmers’ market program simultaneously creates a new market for small fruit and vegetable farmers while promoting better nutrition for nutritionally at risk women, infants and children. Missouri, Illinois and Kentucky were part of the program before 1998, and Arkansas and Mississippi joined the WIC farmers’ market program in 1998; the Delta is the center of activity for this program, because the region contains large concentrations of produce farmers as well as WIC clients. In addition, the Foreign Agriculture Service has conducted a new series of policies designed to include small farmer cooperatives in farm export trade opportunities.

Cooperatives’ assistance for small farmers: In other initiatives addressing the Commission’s concern for limited resource farmers, USDA promoted its programs for assisting cooperatives, which are ideal mechanisms for addressing low population densities, smaller markets, and higher service costs. USDA’s Rural Business Cooperative Services funded 25 technical assistance projects in the Delta, and conducted a series of projects with 1890 Land Grant institutions.

HERMITAGE, ARKANSAS TOMATO COOPERATIVE:

A Model for Developing New Markets in the Rural Delta

When Randy Clanton began working with local tomato growers to form a cooperative in the mid-1990s, many of the producers—like so many small farmers across America—faced the prospect of leaving their Bradley County farms and the familiar rural community where they had always lived. Clanton, a Bradley County farmer who is now President of the Hermitage Tomato Cooperative Association, said the local tomato growers were “dying on the vine.”

By 1999, the Hermitage tomato cooperative had succeeded so impressively that President Clinton praised it as a model for small farmers to create new markets across the country. Eighteen farmers joined forces to pool their crops and resources and open up a processing facility. In a New Markets Initiative visit to Hermitage, the President commended the Hermitage co-op as a model for how rural communities can remain viable as the agricultural economy changes.

“Now you can have a life here in this part of our State and you can prove that people can make a living in rural America and do something good,” Clinton said in his Hermitage speech on November 5, 1999. “And I believe we need more of these kinds of co-ops throughout our country.” The co-op provides a superb model that helps small farmers be more competitive, provides good sustainable jobs in the processing facility as well as spin-off growth from the project, and improves the tax base for rural communities so that infrastructure investment can become a reality.

The co-op was made possible through a partnership of the growers, the U.S. Department of Agriculture’s Rural Development, the Burger King Corporation, Kroger, local banks and other community leaders in Bradley County. As a result of this public-private partnership, the co-op was established to grow and process tomatoes. The organization is made up of tomato growers who were on the brink of being forced out of farming before the co-op’s formation because they could not guarantee the volume required to be competitive. By forming a co-op to establish themselves as higher-volume suppliers, these farmers have been able to gain bigger customers and better prices. They can guarantee a sufficient supply of tomatoes to secure contracts to supply Burger King (through Restaurant Services Incorporated.).

The co-op began in 1996, and has enjoyed a huge expansion of its business in the last few years. In its first year, it produced 3,500 crates of tomatoes for Burger King, but that number skyrocketed to 61,000 crates in its second year, and to 65,000 crates in its third year. By 1999, production for Burger King grew to approximately 75,000 crates.

The co-op processing facility employs nearly 120 people during tomato season. These people would otherwise have to leave their homes to find jobs, or might be unemployed or on welfare. The community has begun to enjoy some “spin-off growth,” such as a new restaurant and other new business, as well as a new building for the school district.

The co-op was made possible by a Memorandum of Understanding between USDA and Burger King’s Restaurant Services Incorporated whereby the parties agreed to expand business opportunities in Underserved Disadvantaged Rural Communities (500 counties in rural America with persistent poverty called UDRC’s). The parties committed themselves to identify high-quality business leaders in URDC’s to become approved suppliers for Burger King, to help them obtain financing, provide employment in the communities, and to provide food donations to the nation’s largest anti-hunger charitable organization—Second Harvest.

In 1998, USDA provided vital assistance for the co-op in the form of a $3 million Business and Industry Guaranteed loan to purchase and modernize the processing plant. In 1999, a loan was guaranteed for $1,850,000 to construct a building to house an additional packing line and increase the cooling capacity of the Cooperative. In December 1999, President Clinton announced that a third loan in the amount of $4,754,860 would be guaranteed to purchase equipment, remodel an existing building for a re-packing operation, and construct a farm supply store and a convenience store. This loan provides the co-op with a year round operation, creating more stability for the income stream and the farmers. The co-op increased its membership from 15 to 23 with the possibility of additional members in the future.

The President was accompanied by a host of Cabinet members and other nationally recognized figures, including Secretary of Agriculture Dan Glickman, Secretary of Transportation Rodney Slater, Small Business Administrator Aida Alvarez, Reverend Jesse Jackson, Congressman Jay Dickey (R-Ark.), USDA Rural Development Under Secretary Jill Long Thompson, the Chief Executive Officers of Kroger, Burger King and many others. Clanton and Hermitage Mayor Mike Colvin were among the main speakers. Wilbur Peer, an Arkansas native who served in the Clinton Administration as Associate Administrator of Rural Business/Cooperative Services in Washington, D.C., was instrumental in supporting the project from its beginnings. The co-op was assisted by USDA Rural Development State Director John Edwards and Shirley Tucker, based in Little Rock. With the B&I loan guarantee, the co-op found its lender in Farmers Bank of Hamburg, Arkansas. The co-op earned nearly $3.9 million in sales in 1998, when its members produced and processed 412,000 20-pound cartons of tomatoes from approximately 300 acres. For Burger King alone, the co-op packaged 60,000 cartons.

Before the co-op’s formation, Clanton said, the local small farmers “had no chance of surviving. Most had their own processing equipment on their farms, and it wasn’t modern or big enough to handle even another neighbor’s production.” Once the farmers set up the co-op, they could seek appropriate funding to purchase the land and an existing tomato processing facility, to upgrade and buy equipment, and provide working capital. The better processing line, packaging and marketing would give members’ product a unique look and help them compete for new markets.

Clanton sums it all up by saying, “We want to be on the cutting edge, not left behind.”

Sustainable agriculture: The Commission urged Congress and USDA to support a stable, sustainable, agriculture, which is profitable yet preserves the environment. On this subject, USDA has formed the Sustainable Agriculture Research and Education program (SARE). SARE has pursued a variety of projects in the Delta aimed at promoting value-added enterprises, sustainable forestry practices, and environmental research projects. The Delta also will benefit from President Clinton’s Executive Order of August 12, 1999 creating a national initiative to accelerate the growth of bioenergy, which is the use of biomass (organic matter) to produce electricity and transportation fuels such as ethanol, or chemicals. Corn has long been used to produce ethanol, and the technology is improving for using rice straw as a viable biomass resource.

A SAFETY NET FOR FARMERS

In the late 1990s, farmers in the Delta and throughout the country faced one of the most severe depressions in American history. Emergency Federal relief for agriculture was funded in the autumn of 1999, providing almost $9 billion in aid for farmers beset by depressed prices, drought and other problems. This assistance provided some desperately needed help for farmers struggling for their economic survival.

In looking beyond the 1999 farm crisis, many people knowledgeable about agriculture in the Delta have suggested the need for revised farm legislation. Congress has now spent roughly $19 billion more in the first four years of the “Freedom to Farm” legislation than it was supposed to spend in the entire seven-year life span of the bill. The original concept of Freedom to Farm was an effort to ease the government out of the role of guaranteeing commodity prices. In 1996 and 1997, farmers were benefiting from high prices in the private market while enjoying substantial government payments designed to ease their transition; but as prices have crashed in the last two years, Congress had to pass major bailout legislation.

Agricultural Goals and Recommendations

USDA should aid farmers without delay and with particular emphasis on small and medium size farmers.

Income Assistance: There should be an income assistance program directed at those with the greatest need, particularly smaller and low-income farmers. It would be designed to be commodity-specific in that it will pay producers based on falling prices and income from the crops they actually plant. As they are now, Agricultural Marketing Transition Payments are distributed largely on the basis of past production, which makes the program less responsive to current needs. Congress has created some commodity specific assistance programs—for example, peanut producers are currently applying for the Farm Service Agency (FSA) Peanut Marketing Assistance Payments, which are designed to help producers affected by reductions in quotas. There also were similar commodity specific programs, such as the Small Hog Operation Payment (SHOP) program and the Dairy Market Loss Assistance Program in FY 99.

Crop Insurance: Legislation is needed for a comprehensive crop insurance reform program as soon as possible. Until such time, we must act now, and recommend the following key legislative changes:

• We should continue the premium discount provided by previous emergency bills to make crop insurance more affordable and accessible for farmers. In 1999, this program helped farmers increase by $4 billion the amount of coverage available in the event of natural disasters and market declines. Long term, there is a need to modify the premium rate subsidy to give greater incentive for producers to buy higher levels of coverage. Congress should include provisions relating to mandatory participation;

• There should be standards for reimbursing private developers of new policies, more flexible contracting authority for the Risk Management Agency (RMA), and designation of RMA as developer of last resort for certain narrow-market policies; and

• The Noninsured Crop Disaster Assistance Program’s (NAP) area-wide threshold should be replaced with a statutory requirement that would extend eligibility to production losses in areas declared by either the president or the Secretary of Agriculture as natural disasters. This change would have the advantage of providing benefits to farmers whenever a natural disaster is declared and would expedite delivery of payments to producers. There should be the same level of risk protection for catastrophic losses for all insured and noninsured crops. This means NAP should maintain the same level as catastrophic risk protection coverage. The Administration supports an increase in the gross income cap on eligibility for NAP benefits from $2 million to $2.5 million. This change is consistent with other program benefit requirements.

Other Provisions: Other targeted proposals include increasing and expanding international food assistance programs; helping livestock producers with emergency feed assistance and weather-related livestock mortality losses; providing additional loans for farmers and ranchers, including emergency loans; and outreach and technical assistance to farm workers and socially disadvantaged farmers.

These proposals are thorough. Rather than simply throwing money at the problem, we want to be smart and timely about providing for the long-term while helping farmers and ranchers with their immediate needs. The 1996 farm bill, while not to blame for all farmers’ problems, did not provide an adequate safety net for farmers, as the current farm economy indicates. Congress needs to address the long-term structural issues that face American agriculture.

Trade: The Administration firmly supports the expansion of exports as a critical element of the Federal government’s response to the farm crisis. Further energizing our export expansion activities will help us bring markets into balance sooner, thus hastening the recovery of the farm economy. Therefore, the Administration is renewing its request for authority to roll forward the Export Enhancement Program balances to future years or use some of those funds for food aid or other export assistance activities.

Export Assistance for small and minority farmers: Small and minority farmers have historically suffered from disadvantages in the export trade, and in order to help address this problem, USDA plans to conduct pilot programs in Mississippi and perhaps other Delta States to train small and minority producers in export marketing. The Export Readiness Training (ERT) pilot program is developed under the aegis and with the funding support of the Emerging Markets Program of USDA’s Foreign Agricultural Service (FAS). Additional funding is being provided by SUSTA (Southern United States Trade Association) and the international Small Business Development Centers in Mississippi (the program will also be conducted in Alabama and Georgia). The program will be conducted in partnership with the State departments of agriculture; the international Small Business Development Centers; Alcorn State University, one of the Historically Black Colleges and Universities (HBCUs), which will conduct the training; SUSTA; and FAS’s Emerging Markets Office.

The training will help participants identify, research, and take advantage of potential export opportunities and will include instruction on developing and marketing as well as familiarizing the participants with the basics of international marketing. The intent of the pilot program is to train approximately 30 candidates from groups, which may include individual farmers, producer cooperatives, processing firms, and other small and minority agricultural businesses. It will also include selected participants who will be trained as trainers for several organizations representing small and minority producers in the region. The length of training is expected to be 2 years, with slight variations in each State. The training program begins in calendar year 2000. The training involves initial funding of $166,666 in Mississippi. This and similar programs should be expanded to provide further opportunities for including small and minority farmers in America’s export trade. Research, Education and Extension (REE): The following programs offer valuable assistance to Delta farmers:

• The Cooperative, State Research, Education and Extension Service recommends continuing and expanding support for universities to work with small farmers to develop research, education and extension programs. In particular, programs for the development of value-added products, entrepreneurial and business skills, and assistance for beginning farmers should be promoted. Increased funding for the Evans-Allen 1890 Land Grants program will strengthen support for underserved rural populations in the Delta. Research should be promoted that builds on developing linkages with Extension programs, such as nutrition initiatives, targeted toward low-income communities and families. Increased funding should be targeted for Extension formula programs at the 1890 Land Grant Universities to support Sustainable Agriculture and/or Forestry Dependent Rural Communities.

• The Agricultural Research Service recommends increased research on stresses that affect the integrity of ecosystem structure. These stresses include changes in land and resource use, introduction of invasive species, use of pollutants and excessive nutrients, and changes in atmosphere and climate. In addition, through the Delta Nutrition Intervention Initiative, there should be support for the continuation and growth of research on nutrition. This is critical in addressing health issues that can be linked to lack of proper nutrition for vulnerable populations in the Delta. Research on the effects of genetic modifications in aquaculture species also should be promoted, in consultation with other agencies and academic institutions. Ongoing research on improving disease detection and prevention in aquaculture also should be supported.

• The Animal and Plant Health Inspection Service (APHIS): A national aquaculture regulatory program could provide aquaculture producers with services identical to those received by other livestock farmers, such as enhanced protection from incursions of exotic diseases. A national program would protect the health of farm-raised fin fish, meet international trade requirements, and help encourage trade in American aquaculture products. This would be especially beneficial to the Mississippi Delta region, which has experienced growth in the aquaculture industry in recent years. For example, Mississippi has more than 108,000 acres (1999 NASS figures) of catfish ponds and produces approximately 75 percent of America’s catfish. Currently, USDA’s APHIS assists the aquaculture industry, but its ability to assist aquaculture producers is limited.

• Regional farmers’ marketing technical assistance: The Agricultural Marketing Service’s (AMS) Wholesale and Alternative Marketing program promotes the development of farmers’ direct markets, as well as collection and wholesale markets. Regional initiatives to promote farmers’ markets in the Delta would be used to conduct research to identify marketing strategies appropriate for small- to medium-sized producers in the Delta, provide technical assistance, and work directly with State departments of agriculture and other organizations that assist producers in agricultural marketing activities. Pilot projects should be developed to demonstrate marketing strategies and testing of innovative marketing approaches. Feasibility studies would be conducted for marketing projects, and lessons learned on individual projects would be used for future studies. Expanding the WIC Farmers’ Market Nutrition Program: As explained more fully in the food security recommendations, USDA is working with local nutrition and farmers’ market supporters to expand the program to more States and to enlarge the program in States where it currently exists. Five of the seven Delta States—Arkansas, Mississippi, Missouri, Kentucky, and Illinois—are in the program. Louisiana and Tennessee certainly would be welcomed into the program. The participants are able to enjoy fresh, wholesome produce while small local farmers gain financially by expanding their markets to the WIC population.

Conservation: An important component of keeping farmers in business over the long term is good environmental stewardship. The following actions will assist in this endeavor:

• increasing the Conservation Reserve Program to 40 million acres from the current 36.4 million acres;

• increase bonuses for continuous sign-ups for the Conservation Reserve Program by $100 million per year, in FY2000 to 2002;

• raising the cap on the Wetland Reserve Program to enroll 250,000 acres per year;

• increasing funding for the Environmental Quality Incentives Program to $325 million; and

• improving technical assistance for farmers and ranchers.