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Heath defends funding

Wednesday, October 9, 2013

By MICKEY POWELL - Bulletin Staff Writer

Mark Heath presented information to Martinsville City Council on Tuesday to show that Martinsville is getting its bang for the buck in terms of its financial support for the Martinsville-Henry County Economic Development Corp. (EDC).

Based on information that Heath, the EDC’s president and chief executive officer presented, council members seemed to agree. None directly expressed any disagreement.

Citing figures from the Virginia Economic Development Partnership (VEDP), Heath said that among the approximately 135 cities and counties statewide, Martinsville-Henry County ranks 12th in terms of the economic development announcements made since the 2007 fiscal year.

There have been 47 local announcements representing 2,936 new jobs and $280.8 million in new investments, figures show.

Martinsville-Henry County ranks 11th solely in terms of the number of new jobs, the figures reveal.

In the community, “no task we have is more important” than creating jobs, Heath emphasized.

Basically all of the localities ranked higher than Martinsville-Henry County in those categories are “urban” — metropolitan — areas, Heath noted.

Martinsville-Henry County had more economic development announcements than surrounding localities. Danville was next highest with 43, figures show.

However, Danville ranked first in the region in terms of the number of jobs created in the announcements with 3,780. Martinsville-Henry County ranked second in the region with its 2,936 new jobs, according to the VEDP figures.

Danville was eighth in the statewide rankings on new jobs announced since fiscal 2007.

The EDC is funded by the city, Henry County and The Harvest Foundation, plus the Martinsville-Henry County Chamber of Commerce and its affiliate organization, the Chamber’s Partnership for Economic Growth (C-PEG).

Annual funding for the organization has declined from $1.9 million in fiscal year 2007 to $1.765 million in the current fiscal year. The city has reduced its share of annual funding from $400,000 to $279,500 over the period.

Martinsville’s current share amounts to 15.8 percent of the EDC’s budget, information provided by Heath shows.

Of the $2.818 million that the city has provided the EDC in the past eight years, Heath said $1.44 million, or almost 51 percent, has been spent on “product development” — things intended to increase the community’s chances of attracting new businesses and industries.

Those things include new shell buildings, industrial site grading and new “welcome” signs installed in Martinsville, Heath’s presentation showed.

Subtract the money spent on product development from the city’s total contribution, and the result is a net cost of a little more than $1.38 million that Martinsville has spent on the EDC, Heath’s figures show.

Councilwoman Sharon Brooks Hodge, who during a previous council meeting asked Heath to prove the city is getting a good return on its EDC investment, commended him for putting “so much energy” into his report.

The council must hold the EDC accountable, and the data shows that the organization is accountable, Hodge said.

Based on information he said that he gleaned from social media, Councilman Danny Turner said he understands that Martinsville-Henry County’s per capita income is the seventh lowest in the country.

Mayor Kim Adkins said she understands that is based on an average “living wage” of $32,000 annually.

Heath said the EDC aims to help improve that ranking.

Still, “we’re not that different from a thousand other communities in the southeast” United States whose economies traditionally have been based around low-skill, low-wage jobs, such as ones in manufacturing, he said.

“There is growth in manufacturing,” Heath said. In the future, he said, “that growth will go where there’s the highest skilled labor.”

He indicated that is why the community needs efforts — such as the New College Institute’s advanced manufacturing program being developed — to prepare people for industrial jobs of the future.

U.S. Census Bureau statistics cited by Heath show that in 2011, the latest year for which figures could be obtained, 10,451 Martinsville-Henry County residents commuted regularly to jobs outside the community while 9,655 people from other areas came here to work.

Those statistics, Heath noted, show that while 1,382 local residents travel to Danville-Pittsylvania County to work, 1,502 residents of that community commute to jobs in Martinsville and Henry County.

Commuting has become a norm in society, according to Heath.

“The notion that anybody who lives here will have a job here is a false notion,” he told the council. The labor market “doesn’t work that way.”

Referring to Danville’s high number of new job announcements, Heath said “we should be thankful” that Danville and Pittsylvania County are doing well from an economic perspective.

Their figures, plus the Martinsville-Henry County numbers, prove that Southern Virginia has a strong labor market, he said.

 

 
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