CONNECT SI Southern Illinois: Garden of the Gods Readiness Assessment Chapter 6: Regional Perspectives January 27, 2008; revised February 17 ViTAL Economy Alliance Frank Knott, Project Lead; Stan Halle, Senior Editor; Jim Haguewood, Rob Beynon, & Neil Gamroth, Principal Economic Researchers fknottmd@earthlink.net; http://www.vitaleconomy.com —1— ©2007 ViTAL Economy, Inc. Table of Contents EXECUTIVE OVERVIEW: the Big Picture & Importance of Change in SI READINESS ASSESSMENT (RA) 1. State, National & Global Trends 2. Indigenous Resources & Industry Asset Mapping 3. Enabling Environment Necessities 4. Climate of Innovation, Incubation & Entrepreneurship 6.01 Demographic Picture 6.02 Economic Picture Across SI 5. Southern Illinois Competitiveness 6.03 Economic Picture by SubRegion (COI) 6. Regional Perspectives 6.04 Livable Community: Assessment 7. Roadmap to Success 6.05 Infrastructure: Assessment 6.06 Healthcare: Assessment APPENDICES 6.07 Implications & Recommendations —2— ©2007 ViTAL Economy, Inc. Southern Illinois — "Garden of the Gods" This Chapter of the RA provides a regional and sub-regional perspective and analysis in preparation for an overall SI economic strategy. Each sub-region (aka geographic COI) contains unique assets that can be leveraged to support the achievement of the overall Connect SI community and economic development goals . Chapter 6: Regional Perspective 6.01 Demographic Picture ……………………………………………….. 4 6.02 Economic Picture Across SI ………………………………………. 10 6.03 Economic Picture by Sub-Region (COI) …………………………. 26 6.04 Livable Community: Assessment …………………………………. 64 6.05 Infrastructure: Assessment ………………………………………… 84 6.06 Healthcare: Assessment …………………………………………… 89 6.07 Implications & Recommendations ……………………………….. 116 —3— ©2007 ViTAL Economy, Inc. Southern Illinois — "Garden of the Gods" This Section provides a condensed overview of the demographic trends across SI, focusing on youth brain drain and educational attainment. Chapter 6: Regional Perspective 6.01 Demographic Picture —4— ©2007 ViTAL Economy, Inc. SI: Sizeable Population . . . 6.01 Demographic Picture % of the Total Population by Sub-Region Over 419,992 residents in SI region, comparable to a major metropolitan area (as of 2006) Greater Egypt corridors of Highway SR13 & I-55 and the home of SIU contain most of the region’s population Three rural sub-regions are approximately equal in geographic area SI represents 3.3% of total IL population 300,000 250,000 61% 200,000 S5 SE GW GE 150,000 100,000 50,000 15% 12% 12% 0 Critical mass exists in Southern Illinois! Source: Census Bureau data 2002, 2006 —5— ©2007 ViTAL Economy, Inc. 6.01 Demographic Picture SI Youth and Young-Adult Brain-Drain-Gap Southern Illinois % Population Growth 1990-2000 (census-to-census) 1 0 -1 -2 +0.9% TOTAL POPULATION -7.2% -3 20-29 YEAR OLDS -4 -5 -6 -7 SI is losing tomorrow’s workers, 20-29 year olds Over 18 population: 65.7% have high school education, 13.2% have Bachelors degrees Recent trends show that high achievers are leaving the area Recapturing departing youth is key to labor pool and economic growth -8 Without the next generation of workers, Connect SI strategies will be much more difficult to achieve Source: BEA and U.S. Census update data —6— ©2007 ViTAL Economy, Inc. 6.01 Demographic Picture “We Loose the Best and Brightest: SI Adults Tell Our Children That There Will Be No 21st Century Opportunity in SI” Age Distribution Comparison SIU and the community colleges generate an above average 2030 year old population This young population leaves the region for more attractive opportunities, despite SI having the resources that should help retain them 8.00% Increasing Your Burden 7.00% 6.00% 5.00% 4.00% Losing Your 3.00% Future Workforce Increasing Your Burden 2.00% 1.00% SI Illinois 90 + 0.00% un de r 15 5 to 1 30 9 to 34 40 to 4 60 9 to 6 75 4 to 79 Proportion of Population (%) 9.00% Losing Your Future Workforce SI is losing its most productive age group while increasing the resource-demanding demographic of retirees The youth are already here — they need to be proactively retained Source: U.S. Census Bureau – Table QT-P1: Age Groups and Sex: 2000 and RA Interviews —7— ©2007 ViTAL Economy, Inc. SI Educational Attainment Gap 6.01 Demographic Picture SI region lags Illinois in high school completion Bachelor and higher degrees of education, SI is less than half Illinois rate Trends run counter to modern need for increased levels of education and training Population with High School or Higher in SI Regions vs. IL S5 SE GW GE IL 0% 20% 40% 60% 80% 100% Population with Bachelor Degree or Higher in SI Regions vs. IL S5 SE GW GE IL U.S. 34% of adult workers in the U.S. have a bachelor degrees or more; almost three times the SI rate 0% 10% 20% 30% 40% Source: U.S. Census Bureau (2000 Census) —8— ©2007 ViTAL Economy, Inc. 6.01 Demographic Picture SI is the size of a major metro area — but doesn’t yet behave like one The entire region is suffering from significant youth brain drain Demographics Summary A declining youth demographic is a major challenge to developing successful economic development strategies The population is aging in line with the entire U.S. This will have a larger impact on the region if SI cannot recapture the youth leaving and influencing this shift SIU and the community college infrastructure provides a key driver to shift the aging demographic trend in SI The overall educational attainment level will need to be increased for SI to compete in a global economy —9— ©2007 ViTAL Economy, Inc. Southern Illinois — "Garden of the Gods" This Section provides a condensed overview of the economic development assets, conditions and trends for all of SI. Chapter 6: Regional Perspective 6.02 Economic Picture Across SI — 10 — ©2007 ViTAL Economy, Inc. 6.02 Economic Picture Across SI SI Regional Introduction • SI population and economy are similar to that of a major metropolitan area o Even with this size Southern Illinois suffers from lack of political clout state-wide due to the “Chicago-land” influence • The cities bordering SI in neighboring states are attractive and draw money and resources out of the region o A significant proportion of medical patient dollars from the region travel to surrounding states o Attractive job opportunities have been created in the neighboring cities that result in out-migration of disposable income expenditures o Many top management personnel live in these communities and work in SI • From 2001-2003 the SI region lost over 2,300 manufacturing jobs or 20% of that sectors employment • Greater Egypt dominates the SI region with respect to population and GDP, but not in average wage levels • Government transfer payments comprise 64% of the regions personal income • The region possesses a strong and experienced social services infrastructure • SI’s land base is dominated by agriculture designation, but has been experiencing declining economic benefit (through 2005) — 11 — ©2007 ViTAL Economy, Inc. Economic Profile: Southern Illinois 6.02 Economic Picture Across SI SI # of Jobs by Region Employment by Sector 160,000 Number % Average Wage Wholesale & Retail 28,910 14% $29,339 Government 26,597 13% $51,139 Health 22,210 11% $29,363 Other 20,320 10% $29,649 Natural Resources 20,246 10% $35,097 Manufacturing 18,009 9% $54,310 Tourism 16,862 8% $16,332 Education 14,984 7% $28,285 F.I.R.E. 12,525 6% $59,720 KBEs 9,011 4% $57,617 Construction 8,996 4% $48,246 Transport & Utilities 8,627 4% $52,414 207,297 100% $38,952 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 S5 SE GW GE Overview: Employment: 207,297 Labor Participation rate 66.5% GDP: $17.6 billion Top three GDP producers 1. Government – 20% 2. F.I.R.E. – 18% 3. Natural Resources – 13% Total Source: BEA data; VE Economic Scenario Model F.I.R.E = Finance, Insurance & Real Estate — 12 — ©2007 ViTAL Economy, Inc. Greater Egypt Dominates SI Economy 6.02 Economic Picture Across SI Population by Sub-Region GDP by Sub-Region 300,000 $12.0 64% 250,000 $10.0 $8.0 S5 SE 200,000 $6.0 GW GE 150,000 61% S5 SE GW GE 100,000 $4.0 50,000 $2.0 11% 11% 14% 15% 12% 12% 0 $0.0 Population GDP ($Billions) Source: Census Bureau Source: Connect SI Economic Scenario Model • Greater Egypt's economic progress should be linked to the other sub-regions • • Achieving a sustainable and growing SI economy, requires that all sub-region assets should be integrated and leveraged • It takes critical mass to be globally competitive • Collaboration is how SI gets there! — 13 — ©2007 ViTAL Economy, Inc. Population and Wages: SI versus Illinois & U.S. 6.02 Economic Picture Across SI Cumulative Population Trend (1980 – 2005) 35% 30% 25% 20% 15% 10% 5% 0% -5% 30.5% Population in Southern Illinois has seen a decline in the past 25 years — a dramatic difference vs. Illinois and U.S. trends Total wage growth in SI has been slow, far outpaced by that of both U.S. and Illinois U.S. IL 11.6% (-3.0%) SI Growth in Wages Over 25 Years (1980 – 2005) $30,000 $25,000 $20,000 $15,000 63% Higher Than SI 73% Higher Than SI U.S. IL SI $10,000 $5,000 $0 U.S. IL SI Source: Bureau of Economic Analysis — 14 — ©2007 ViTAL Economy, Inc. Average Wages Lagging 6.02 Economic Picture Across SI SI region average wages are almost 30% lower than the state average While IL wages are above the U.S. on average, SI wages remain below Lower wages mean lower consumer spending power with additional impacts on healthcare, education and social services 2005 Average Wage by Sub-Region versus IL $50,000 $40,000 $30,000 $20,000 S5 SE GW GE IL US $10,000 $0 Greater Egypt’s economy is four times the size of the other sub-regions, has the largest base of innovation assets, and two of its counties are rated as Creative-Class Counties, yet its wages are no higher than rest of SI Source: BEA, Regional Economic Accounts — 15 — ©2007 ViTAL Economy, Inc. SI Per-Capita Wages are Low and Per-Capita Transfer Receipts are High 6.02 Economic Picture Across SI $35,000 $30,000 $25,000 $20,000 Per-Capita Wages $15,000 Per-Capita Transfer Receipts $10,000 $5,000 $0 S5 SE GW GE IL KY IN Southern Illinois SI currently underperforms Illinois — Connect SI’s initiative would push transfer receipts down and push per capita wages up Source: Bureau of Economic Analysis Regional Bare Facts ; 2006 — 16 — ©2007 ViTAL Economy, Inc. Where SI Personal Income Comes From 6.02 Economic Picture Across SI GW GE SE S5 SI Illinois U.S. Total Personal Income (% of personal income composition) 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Earnings by Workplace 57.0% 69.0% 54.5% 52.0% 63.5% 79.5% 78.0% Wage and Salary Disbursements 35.4% 48.8% 36.5% 35.1% 43.7% 57.3% 55.5% Supplements to Wages and Salaries 10.7% 13.2% 9.4% 9.6% 11.9% 13.5% 13.3% Proprietors' Income (Business Owners) 10.9% 7.1% 8.6% 7.3% 7.8% 8.7% 9.2% Adjustment for Residence 8.7% -0.3% 7.0% 10.6% 3.2% -0.3% 0.0% Dividends, Interest, and Rent 18.5% 16.6% 15.9% 14.4% 16.5% 16.5% 15.8% Personal Current Transfer Receipts 21.4% 21.7% 28.2% 28.2% 23.3% 12.8% 14.7% Less: Contributions for Government Social Insurance 5.7% 7.0% 5.7% 5.2% 6.5% 8.4% 8.5% SI earnings by workplace are 25% lower than Illinois, 23% lower than US SI needs to grow the job base by at least 20% = 40,000+ new jobs Source: Bureau of Economic Analysis Regional Bare Facts 2006; Connect SI Economic Model — 17 — ©2007 ViTAL Economy, Inc. 6.02 Economic Picture Across SI SI Dependency on Government Transfer Payments Exceeds State & National Benchmarks 2006 Government Transfer Payments as % of Total Earnings 35 30 25 SI 20 15 U.S. IL 10 5 0 % of Total Earnings Southern Five Southeastern Greater Wabash Greater Egypt Transfer payments: income payments to persons for which no current services are performed — payments by government and business to individuals and nonprofit institutions serving individuals SI region’s income is comprised of 23.1% government transfer payments, compared with just 12.6% for IL and 14.2% for U.S. Highest dependency on government transfer payments in Southern Five and Southeastern — percent of income through such payments exceeds 25% Dependence on government payments restrains regional economic development and hinders entrepreneurial spirit Source: Bureau of Economic Analysis Regional Bare Facts 2006 — 18 — ©2007 ViTAL Economy, Inc. 6.02 Economic Picture Across SI Only 46% of SI Personal Income is Generated by Private Sector Employment 70% 60% U.S. 64% 67% 54% 50% 40% Private Sector Payroll & Benefits by Sub-Region 46% IL 36% 30% SI 33% GW - 48% GE - 53% SE - 42% S5 - 38% 20% 10% 0% Private Sector Transfer Payments Increasing private sector percentage of personal income generation is crucial to building a climate of innovation Source: BEA & ViTAL Economy Analysis — 19 — ©2007 ViTAL Economy, Inc. Income Sources: Impact on the Region 6.02 Economic Picture Across SI SI needs a 30% increase in private vs. public sector earnings to equal the U.S. ratio between public and private earnings Majority of income received from the public sector reduces the climate of entrepreneurship in the region and creates a risk-averse environment Smaller amount of per-capital income generated through productive purposes versus a much larger amount received from public sources and other transfer payments results in a weak view of business and economic opportunity Income disparity creates negative opportunity image for youth in the region for productive work Income disparity fuels the youth brain drain in the region by suppressing any youthful sense of hope and opportunity With only 46% of income received from private sector earnings, SI’s ability to afford the community and economy it wants is greatly limited — 20 — ©2007 ViTAL Economy, Inc. SI Land Utilization is Less Than 3% Urban & Built 6.02 Economic Picture Across SI Sq. Mi. 5,229 2500 1,581 671 239 216 369 8,306 Sq. Mi. 2000 Southern Five 1500 Southeastern Greater Egypt 1000 Greater Wabash 500 0 Agriculture Forests Urban & Built Wetland Surface Water Land Mass Utilization S5 SE GE GW SI Agriculture 47% 59% 65% 80% 63% Forests 21% 28% 16% 13% 19% Urban & Built 2% 3% 4% 2% 3% Wetland 8% 8% 10% 4% 8% Surface Water 2% 2% 4% 1% 3% Barren & Exposed Land 20% 0% 0% 0% 4% — 21 — Barren & Exposed Land • SI developed land mass is only 57% the size of Shawnee National Forest • Shawnee National Forest is 5% of SI land base Source: Illinois State Dept of Natural Resources ©2007 ViTAL Economy, Inc. The Value of SI Land is Shifting 6.02 Economic Picture Across SI 1997 2002* % Change Land in Farms (Acres) 1,185,000 1,192,000 1% Market Value of Production ($) $184,331,000 $151,092,500 -18% Government Payments ($) $12,919,000 $16,235,000 26% • *2007 Agriculture statistics will reflect higher market value per acre due to increased commodity prices, especially for hybrid ethanol corn • Since 2000: o Number of farms and acres being farmed has stayed relatively stable o Value of farmland and buildings has increased by 27% o Cropland rent per acre has increased by 20% • Up to 60% lower yield in crop value per acre compared to Central Illinois or Northern Illinois o Soil and moisture characteristics account for much of the lower yield Source: NASS 2002 Census of Agriculture — 22 — ©2007 ViTAL Economy, Inc. SI KBE: Professional, Scientific, Technical and Information (PST&I) Work Force Gap 6.02 Economic Picture Across SI SI has 50% fewer PST&I workers than IL and U.S. at a time when they are the fastest growing job sectors of the U.S. economy % of Employment 10% 8% 8.5% 7.7% 6% 4% 2% 0% KBE success largely related to PST sector of the economy (90% of new jobs) PST workers as percent of economy indicates ability to benefit from this growth area IL SI Information industry “I” workers work with telecom and information networks U.S. 4.3% PST workers include those in establishments specializing in professional, scientific and technical activities — engineering, computers, architecture, law, and accounting Region KBE Workers % of SI KBE 6,227 69% 907 10% Southeastern 1,070 12% Southern Five 808 9% 9,012 4.3% Greater Egypt Greater Wabash SI Total KBE Sources: BLS, IDES, BEA — 23 — ©2007 ViTAL Economy, Inc. 6.02 Economic Picture Across SI Current State: Southern Illinois Traditional Business Strengths Rising Business Stars • • • • • • • • • • • • Agriculture: corn and soybeans Energy: coal and oil Southern illinois university Manufacturing Marine transportation and logistics Transportation and logistics Tourism, including ecotourism and vineyards Clean coal technologies Health services Advanced manufacturing Arts and artisans Young entrepreneurs People, Land & Jobs Notable • % of IL Land Mass = 15.0% • % of IL Population = 3.3% • % of IL Employment = 2.8% • • • • • Dependencies • • • • • Public sector employment Transfer payments Social security Pensions Farm subsidies Home to 2nd largest university in Illinois Shawnee National Forest Mississippi, Ohio, and Wabash Rivers Interstate highway system and CN Rail SICCM (Southern Illinois Collegiate Common Market) • Mid-America geographic location • Rich historical area and assets • Proximity to five major metro areas — 24 — ©2007 ViTAL Economy, Inc. 6.02 Economic Picture Across SI Opportunities & Challenges: Southern Illinois Opportunities Challenges • • • • • • • • • • • • • • • • • • • Natural resources Transportation & logistics Homeland security Recreational tourism Geography, climate & location Quality of life Proximity to markets Senior living KBE and innovation Broadband coverage Geographic isolation Political climate Business attractiveness Curb appeal Regional identity Workforce availability Focus on sunset industries Self image and respect Limit climate of collaboration Key Trends Growth Enablers • • • • • • • • • • • • • • • • • • • Youth population decline Hwy 13 I-57 corridor growth SIU declining enrollment Medical professional recruitment difficulties Coal economy rebirth Upscale tourism unaddressed Expanded internet infrastructure One Region – One Vision Aging population Emerging KBE businesses Business incubation structures Business startup capital, angel investor networks Regional branding Value-added manufacturing strategies Connectivity & collaboration Entrepreneur networks Business and industry clustering Technology transfer e-Commerce development — 25 — ©2007 ViTAL Economy, Inc. Southern Illinois — "Garden of the Gods" This Section provides economic factors that were identified by each of the four geographic COIs, plus notable trends, and 2012 goals. Chapter 6: Regional Perspective 6.03 Economic Picture by Sub-Region (COI) — 26 — ©2007 ViTAL Economy, Inc. The 20 Southern Counties of Illinois 6.02 Economic Picture by Region Connect SI includes 4 sub-regions: bounded by the Mississippi, Ohio and Wabash Rivers Connect-SI Region 130 Miles East-West Southern Five Union, Johnson, Alexander, Pulaski, Massac Southeastern Pope, Hardin, Saline, Hamilton, Gallatin GE Greater Wabash Randolph, Perry, Jackson, Jefferson, Franklin, Williamson 100 Miles North to South SE White, Wayne, Edwards, Wabash Greater Egypt G W S5 Population = 423,670 Source: U.S. Census Bureau 2006; VE Economic Scenario Model — 27 — Workforce = 207,297 ©2007 ViTAL Economy, Inc. Economic Profile: Southern Five COI 6.03 Economic Picture by Sub-Region SI Number of Jobs by Region Employment by Sector 160,000 Number % Average Wage Government 4,076 17% $51,139 Wholesale & Retail 3,027 12% $31,953 Natural Resources 2,932 12% $22,236 Health 2,541 10% $29,363 Tourism 2,444 10% $16,329 Manufacturing 1,568 6% $54,310 Overview: F.I.R.E. 1,359 6% $59,035 • Labor Participation Rate – 62.8% Education 1,228 5% $28,285 • GDP: $2.1 billion Construction 1,145 5% $48,246 Transport & Utilities 963 4% $55,430 • Government – 26% KBEs 809 3% $57,478 • F.I.R.E. – 17% Other 2,225 9% $29,549 • Natural Resources – 12% Total 24,317 100% $37,641 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 S5 SE GW GE o Top three GDP generators Source: BEA Data and RIMS II multipliers — 28 — ©2007 ViTAL Economy, Inc. S5 Southern Five Population Trends Prison Population Removed (None in S5 Open in 1980) 6.03 Economic Picture by Sub-Region 1980 Alexander 2004 est. Change 2004 est. No Prison Change No Prison 12,280 9,228 (-24.9%) 8,774 (-28.6%) Johnson 9,691 13,029 34.4% 9,431 2.7% Massac 15,036 15,294 1.7% 15,294 1.7% Pulaski 8,847 6,950 (-21.4%) 6,950 (-21.4%) 17,857 18,195 1.9% 18,195 1.9% 63,711 62,696 (-1.6%) 58,644 (-8.0)% Union Southern Five Region Comparison during same period: USA +13.1%: Illinois +11.2%; Illinois (without Prison Population) +10.9% Alexander County has experienced the greatest population decline of any SI county, over 25% since 1980 Source: COI Milestone and U.S. Census Data — 29 — ©2007 ViTAL Economy, Inc. S5 Region Losing Best Resource: Young Adults (No Prison Population included) 6.03 Economic Picture by Sub-Region Young Adults as % of Population (2004) Aging Population (2004) 100% More Retirees 80% 7.0% 6.0% 5.0% 60% 40% 20% 0% IL 64+ 15-64 up to 15 4.0% US 3.0% IL 2.0% S5 Fewer Children 1.0% 0.0% 15-19 20-24 25-29 S5 Source: U.S. Census, Prison Population Removed — 30 — ©2007 ViTAL Economy, Inc. S5 Intermodal Transportation Opportunity 6.03 Economic Picture by Sub-Region Strategic Position of Cairo, Alexander County: Trends: Junction of the Mississippi and Ohio Rivers Interstate 57 Proximity to Interstate 55 and 24 Major rail carriers Large part of U.S. trade deficit is comprised as empty containers returning to Asia Development of CN Rail traffic in the Midwest Increasing container-on-barge traffic on the Mississippi Production of export products in or in proximity to SI including cotton, soy, corn, pulp, silica Active regional transportation providers engaged in river and barge traffic and trucking Opportunity: connect regional products with export markets via transportation infrastructure and services Projected annual economic impact of this Intermodal opportunity is estimated at ~$100 million in GDP (est. 1,182 direct, indirect & induced jobs) Source: ViTAL Economy Economic Scenario Model & Inter VISTAS Intermodal Study for City of Cairo, SIDEZ & USDA — 31 — ©2007 ViTAL Economy, Inc. S5 Economic Profile: Southern Five COI 6.03 Economic Picture by Sub-Region S5 Traditional Business Strengths S5 Rising Business Stars • • • • • • • • • • • • • • • • Government Mississippi barges Forestry Transportation Recreation and tourism Transportation and logistics Tourism, including ecotourism and vineyards Energy, including ethanol, bio-diesel Advanced manufacturing Artisans and arts Proposed coal gasification plant Harrah’s Casino — Metropolis Wineries Golf course & residential development Mermet Springs Diving Center LaFarge Concrete Plant S5 People, Land & Jobs S5 Notable • % of IL Land Mass = 3.3% • % of IL Population = 0.50% • % of IL Employment = 0.33% • • • • S5 Dependencies • Government employment • Transfer payments • Government dependence on casino revenues • • • • • • Mississippi and Ohio Rivers CN Rail North-South line Interstate 55 Tourism, heritage sites & events, e.g.: • Ft. Massac Civil War Encampment • Superman Festival Indian settlements Unique climate & long growing season Shawnee College Mermet Springs Wine, golf, B&B trails Extensive social service expertise — 32 — ©2007 ViTAL Economy, Inc. S5 6.03 Economic Picture by Sub-Region Southern Five Region (23 Feb 2007) Southern Five COI: Goals 2012 Same Trend Baseline 2012 Goal Change vs. Baseline Change vs. 2012 Same Population (2004) 58,644 53,971 63,000 +7.4% +16.7% Employable Population (16-64) (2000) 35,887 33,014 40,950 +14.1% +24.0% Labor Participation (16-64) (2000) 62.8% 62.8% 71.0% +13.1% +13.1% Employed 2004 All Ages 24,317 25,550 26,856 +10.4% +5.1% $27,959 $35,980 $37,591 +$9,632 +$1,611 $679.9m $919.3m $1,010m +$329.7m +$90.3m Average Wage 2004 Total Region Wages 2004 Determination of specific measurable, wage & employment goals from change in regional wages vs. 2012 trend NEW JOBS: 784 WAGE: $43,500 $34.1m NEW JOBS AT AVERAGE WAGE: 522 WAGE: $36,517 $19.6m IMPROVEMENT OF EXISTING JOBS: 4,863 WAGE: $5,000 $24.3m CLIMATE OF ECONOMIC OPPORTUNITY: $12.2m — 33 — ©2007 ViTAL Economy, Inc. S5 6.03 Economic Picture by Sub-Region KBE Identify best practices and trends in trucking and transportation Identify additional training funds for programs Closure of Cairo Airport, best practices of airports in rural areas, location, operations, security issues, trends in air transport Energy Process materials and piping, CO2 in process piping Mental health expertise, exportable mental health product Wetland recovery, flood plains Music production, college instruction and local artists Local history experts Artisans and products Goal: Start 35 businesses with 10 employees each by 2012 Logistics/Transportation Southern Five COI: Opportunities Learn from other communities that have gone through a large project development process Improve communication between communities within 20 county area Research switch grass cellulose potential Nuclear power Tourism B&B’s golf and wineries; build off of successful activities Dining and restaurant needs in support of tourism Aggregate demand with wineries and B&B’s Define the specific regional tourism goals, quantifiable and measurable Linking the different trails together — 34 — ©2007 ViTAL Economy, Inc. S5 6.03 Economic Picture by Sub-Region Southern Five: Highlights S5 Opportunities S5 Challenges • • • • • • • • • • • Lack of skilled workforce for current and future jobs Lack of cooperation, collaboration, and regionalism S5 lacks the assets to grow and retain tech-based jobs No sense of urgency K-12 system needs support Limited healthcare availability to Alexander, Johnson and Pulaski Counties • Electrical rates • “There are so many problems, where do you start” Geography location; transportation & logistics 50% of U.S. market within 10 hours of S5 Community College System and SIU Increase healthcare availability Tourism, bed & breakfast, wineries Shawnee National Forest and state parks Agribusiness opportunities (e.g. ethanol and bio-diesel) Unique natural locations Significant historic site Senior services • • • • • • S5 Key Trends S5 Climate for Growth • • • • • • • • • • • • • Strong core of community leadership Growth of bed and breakfast facilities Expansion and growth of lodging facilities in Metropolis Investment in residential developments Region is receiving major investments attention Most high level executives do not live in the area Limited availability of workforce Source: Connect SI COI, RA Interviews and VE Travel and tourism; history, experience Outdoor recreation activities and events Mississippi and Ohio river transportation Golf and wine trails Transportation and logistics Alternative energy — 35 — ©2007 ViTAL Economy, Inc. S5 6.03 Economic Picture by Sub-Region Economic Profile: Southeastern COI Employment by Sector SE Number of Jobs by Region Number % Average Wage Natural Resources 3,706 17% $36,730 Wholesale & Retail 2,919 13% $32,522 Government 2,763 13% $51,139 Health 2,264 10% $29,363 Tourism 1,590 7% $16,329 F.I.R.E. 1,336 6% $60,261 Transport & Utilities 1,109 5% $51,629 Construction 1,100 5% $48,246 Education 1,021 5% $28,285 823 4% $54,310 KBEs 1069 5% $58,134 Other 2,203 10% $29,352 Total 21,903 100% $39,458 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 S5 SE GW GE Overview: Labor Participation Rate – 69% GDP: $2.0 billion Top three GDP generators 1. Natural Resources – 22% 2. Government – 18% 3. F.I.R.E. – 17% Manufacturing Source: BEA Data and RIMS II Multipliers — 36 — ©2007 ViTAL Economy, Inc. SE Southeastern: Population Trends 6.03 Economic Picture by Sub-Region 1980 2005 est. Change Gallatin 7,590 6,152 (-18.9%) Hamilton 9,172 8,301 (-9.4%) Hardin 5,383 4,718 (-12.3%) Pope 4,404 4,211 (-4.3%) Saline 28,448 26,072 (-8.3%) SE Region 54,997 49,454 (-10.0%) Comparison during same period: USA +13.1%, Illinois +11.2%; (without Prison population 10.7%) In the past 25 years, all five SE counties have lost significant population Source: COI Milestone — 37 — ©2007 ViTAL Economy, Inc. SE Shawnee National Forest Visit Profile and Projections 6.03 Economic Picture by Sub-Region Room for Increased Daily Spend Rates Current Impacts: Shawnee National Forest Annual Visitation 500,000 Characteristic Local Day Trips Non-local Day Trip Motel Camp Current Visitors 46% 12% 27% 9% Visitor Segment 230,000 60,000 135,000 45,000 500,000 Shawnee Spend $27 /day $27 /day $118 /day Est. $113 /day $64 /day Estimated Expenditures $6.2 m $1.6 m $15.9 m $5.1 m $30.2 m National Spend $33 /day $ 52 /day $181 /day Est. $143 /day $105 /day Potential Expenditures $7.6 m $3.1 m $24.4 m $6.4 m $41.6 m Potential Revenue Gain $1.3 m $1.5 m $8.5 m $1.4 m $12.7 m TOTAL Source: NPS Spending and Payroll Impacts, 2005, Spending Profiles for National Forest Visitors, May 2005 Note: Total potential spend for Shawnee is based on totaling national spend category columns, not total visitors x average national spend — 38 — ©2007 ViTAL Economy, Inc. SE Shawnee National Forest: Opportunity SE 6.03 Economic Picture by Sub-Region Increased spending leads to tourism jobs Achieving national averages of daily spend rate estimated to create 235 new jobs in Southern Illinois This is based on forestrelated spending alone Increased non-forest spending would create more jobs Increased Spend Rates to National Averages Would Create 235 Jobs 800 700 600 Jobs 500 Potential Current 400 300 200 100 Infrastructure and camp improvements are needed to achieve this result 0 Note: Analysis based on BEA RIMs II model analysis — 39 — ©2007 ViTAL Economy, Inc. 6.03 Economic Picture by Sub-Region Economic Profile: Southeastern COI SE Traditional Business Strengths SE Rising Business Stars • • • • • • • • • • • • Coal mining Agriculture Hunting Aggregate rock Historical sites and museums Barge and river industry Tourism, including ecotourism Recreational manufacturing Mining-related spin-offs Coal mining Guiding and Outfitting Disaster recovery knowledge SE People, Land & Jobs SE Notable • % of IL Land Mass = 3.07% • % of IL Population = 0.40% • % of IL Employment = 0.30% • • • • • SE Dependencies • Government jobs • Transfer payments • • • • Ohio Scenic Byway Coal reserves Shawnee National Forest, Garden of the Gods Southeastern Illinois College Tourism & heritage sites & events, eg: Slave House, Trail of Tears, Milestone Bluffs Festivals: Fresh Water Shrimp Festival, etc. Undeveloped tourism sites Dixon Springs Ag Center Unique climate & long growing season — 40 — ©2007 ViTAL Economy, Inc. SE 6.03 Economic Picture by Sub-Region Southeastern Region (23 Feb 2007) Southeastern COI: Goals 2012 Same Trend Baseline 2012 Goal Change vs. Baseline Change vs. 2012 Same Population (2004) 49,465 47,833 56,000 +13.2% +17.1% Employable Population (16-64) (2000) 31,115 30,373 36,400 +17.0% +19.8% Labor Participation (16-64) (2000) 63.4% 63.4% 70.0% +10.4% +10.4% Employed 2004 All Ages 21,903 19,256 25,500 +16.4% +32.4% $27,494 $35,604 $40,206 +$12,782 +$4,672 $602.2m $685.6m $1,027m +$424.8m +$341.4m Average Wage 2004 Total Region Wages 2004 Determination of specific measurable, wage & employment goals from change in regional wages vs. 2012 trend NEW JOBS: 3,746 WAGE: $43,500 $163.0m NEW JOBS AT AVERAGE WAGE: 2,498 WAGE: $40,276 $100.6m IMPROVEMENT OF EXISTING JOBS: 4,381 WAGE: $5,000 $21.9m CLIMATE OF ECONOMIC OPPORTUNITY: $56.0m — 41 — ©2007 ViTAL Economy, Inc. SE Southeastern COI: Opportunities (1 of 2) 6.03 Economic Picture by Sub-Region What is the market opportunity? Opportunity Lodging capabilities Training facilities Increase marketing access A clear growing need to support the expanded employment need and also the near future retirement of miners Train our own CO, Police, etc. rather than 12 weeks of time and funds spent in Springfield Drug Rehab Center Shawnee National Forest Service participation By linking resources and upgrading skills it will increase the visitor expenditures per day in the region Teaching mine training Correctional Officer Training Center Expanded tourism stays, $175$200/day Bringing Producer closer to Consumer for SI products NO existing program of its kind in SI; Termination of price per day or course needs to be researched. Expanded tourism stays, $175$200/day What unique assets are being leveraged? Locating the facilities near unique areas The Outfitter experience, Ohio Scenic Byway, Festivals SIC (potential link to Rend Lake) — abandoned mines in the area to create a real life training center Existing knowledge base of correction and law enforcement in SI and facilities Shrimp, PM building materials, wines Connect to Tourism (trails) as part of rehab; knowledge base; lodging Shawnee National Forest as one of the most unique locations on North America Source: COI Milestone — 42 — ©2007 ViTAL Economy, Inc. SE Southeastern COI: Opportunities (2 of 2) 6.03 Economic Picture by Sub-Region What is the market opportunity? Opportunity Lodging, Condos, Cabins Food & Dining Game Cuisine Market regional festivals together Team With Rend Lake Culinary Arts School Garden of the Gods Hundreds of visitors experiencing a variety of activities including hiking, biking, hunting, etc. Improvement of the overall tourism and visitor experience and product in the region Unique culinary experience. Preparation of hunters game during their stay in the area. Deer-related products What unique assets are being leveraged? Shawnee National Forest and Glen O. Jones Lake Existing facilities and programs that can be leveraged without large upfront costs Large variety of game available in the region Master calendar and extended stays at $175-$200/day Leveraging visitors to meet local products bringing Producer closer to Consumer Improvement of the overall tourism and visitor experience and product in the region Existing facilities and programs that can be leveraged without large upfront costs, Job Corps, RLC, SIC Expanded tourism stays, $175$200/day One of a kind natural resource Source: COI Milestone — 43 — ©2007 ViTAL Economy, Inc. SE 6.03 Economic Picture by Sub-Region Southeastern Tourism Goals Recognizing the extensive indigenous resources in Southeastern and under-tapped tourism industry potential, the COI set several goals: Increase expenditures by $10m/yr Increase lodging taxes by $85k/yr Increase daily spending by 19% ($60 to $76) Increase occupied room-nights in the region by 8,000 per year Focus on three areas (take 19 areas through the filter): Fee-hunting Historical tours Eco-tourism Source: Southeastern COI — 44 — ©2007 ViTAL Economy, Inc. SE 6.03 Economic Picture by Sub-Region Southeastern Highlights SE Opportunities SE Challenges • Bring resources to SE through relationships and alliances • Natural and small town environments are positive places to live, work and play • Leverage the Dixon Springs Center, unique climate • Grow reputation for entrepreneurship • Grow tourism industry by leveraging unique location, heritage sites and natural features • Unique small river towns • Leverage coal mining knowledge base in new ways; disaster recovery, safety systems, training • • • • • • • SE Key Trends SE Climate for Growth • • • • • • • • • • • • • • Growth and prominence of Southeastern College Rebirth of coal industry Transportation of coal from Shawneetown terminal Regional recognition including videos highlighting the unique natural features • Growth of the Ohio Scenic Byway • Weak workforce availability Overall limited resources in the area Declining tax revenue base Change age demographic Limited broadband penetration Lack of lodging facilities (187 rooms) Limited affordable housing Industrial water availability in Hamilton County for mine expansion • Entrepreneurship support structures • Quality housing stock Agriculture research and development Comfortable mild Midwest climate: senior living Tourism; unique natural environment & locations Vast amount of coal resources Variety of coal industry knowledge Processing of coal closer to raw material Mine to mouth energy production Growing need for coal workers & disaster training Entrepreneurship and innovations KBE workers in unique small towns Source: Connect SI COI, RA Interviews and VE — 45 — ©2007 ViTAL Economy, Inc. SE Economic Profile: Greater Wabash COI GW 6.03 Economic Picture by Sub-Region Employment by Sector GW Number of Jobs by Region Number % Average Wage Natural Resources 4,974 19% $41,213 Wholesale & Retail 3,789 14% $31,223 Manufacturing 2,702 10% $54,310 Government 2,452 9% $51,139 Health 2,377 9% $29,363 F.I.R.E. 1,949 7% $61,000 Tourism 1,334 5% $16,345 Construction 1,283 5% $48,246 Education 1,045 4% $28,285 Transport & Utilities 940 4% $54,220 KBEs 906 3% $57,349 Other 2,641 10% $28,484 Total 26,392 100% $41,009 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 S5 SE GW GE Overview: Labor Participation Rate – 71% GDP: $2.5 billion Top three GDP generators 1. Natural Resources – 25% 2. F.I.R.E. – 19% 3. Government – 13% Lowest % in SI region Source: BEA Data and RIMS II multipliers — 46 — ©2007 ViTAL Economy, Inc. Greater Wabash: Population Trends GW 6.03 Economic Picture by Sub-Region 1980 2004 est. Change Edwards 7,993 6,785 (-15.1%) Wabash 13,776 12,601 (-8.5%) Wayne 18,157 16,814 (-7.4%) White 17,964 15,221 (-15.3%) Greater Wabash Region 57,890 51,421 (-11.2%) Comparison during same period: USA +31.1%, Illinois +11.2% GW has the greatest population loss in SI from 1980 to 2004 — more recent estimates show trend continuing Source: Bureau of Economic Analysis and Census Bureau — 47 — ©2007 ViTAL Economy, Inc. 6.03 Economic Picture by Sub-Region Older Age Distribution Puts SI GW at Economic Disadvantage versus Illinois Proportion of Population (%) Age Distribution Comparison 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% er d n U 5 10 to 14 20 to 24 30 to 34 40 to 44 50 to 54 Greater Wabash 60 to 64 70 to 74 80 to 84 + 90 Dramatic loss of 2034 yr olds in GW region GW has a greater percent of people over 55 than the rest of Illinois Median age higher in GW (40) than Illinois (34.7) Illinois To grow economically, the region needs to retain younger workers and grow job opportunities Source: U.S. Census Bureau – Table QT-P1: Age Groups and Sex: 2000 — 48 — ©2007 ViTAL Economy, Inc. 6.03 Economic Picture by Sub-Region Out-Migration is Eroding GW’s Future Youth Brain Drain (Future Workforce) * 16.3% drop in 10 years * $19.1m in lost wages GW Out-migration of Healthcare Revenues * $32.9m of $55.5m Out-of-Region Jobs & Disposable Income Spending * $14.7m-$23.6m per year * Worth 200-315 Jobs Economic Value Lost to GW: $56.7m-$75.6m EVERY YEAR! — 49 — ©2007 ViTAL Economy, Inc. Economic Profile: Greater Wabash COI GW 6.03 Economic Picture by Sub-Region GW Traditional Business Strengths GW Rising Business Stars • • • • • • • • • Agriculture Mining Manufacturing, eg: Airtex, Champion Labs Oil extraction Education system Tourism, especially hunting Energy Oil industry supplies and equipment Outfitting/Hunting, eg: • Campbell’s Outfitters • Entrepreneur businesses: Elastec, Dinger Bats GW People, Land & Jobs GW Notable • % of IL Land Mass = 3.0% • % of IL Population = 0.41% • % of IL Employment = 0.35% • • • • • • GW Dependencies • • • • Transfer payments High coal industry retirees Pension income Manufacturing employment • • • • • Wabash River Business connections with Indiana Interstate (I-64); proximity to Evansville, IN Nearby Toyota plant (Princeton IN) Postcard small towns College System: Illinois Eastern Community Colleges, Frontier, Wabash Valley Oil reserves Online education initiatives Major regional business owners live in the area Major source of water in the area Lower unemployment rate then the rest of SI Source: Connect SI COI, RA Interviews and VE — 50 — ©2007 ViTAL Economy, Inc. 6.03 Economic Picture by Sub-Region Greater Wabash COI: Goals Greater Wabash Region (23 Feb 2007) 2012 Same Trend Baseline 2012 Goal Change vs. Baseline Change vs. 2012 Same Population (2004) 51,421 49,561 53,000 +3.1% +6.9% Employable Population (16-64) (2000) 31,980 30,777 32,913 +2.9% +6.9% Labor Participation (16-64) (2000) 71.1% 71.1% 72.5% +1.97% +1.97% Employed 2004 All Ages 26,400 25,445 27,746 +5.1% +9.0% $26,311 $33,671 $36,517 +$10,206 +$2,846 $694.6m $856.8m $1,013m +$318.9m +$156.4m Average Wage 2004 Total Region Wages 2004 GW Determination of specific measurable, wage & employment goals from change in regional wages vs. 2012 trend NEW JOBS: 1,381 WAGE: $43,500 $60.1m NEW JOBS AT AVERAGE WAGE: 920 WAGE: $36,517 $33.6m IMPROVEMENT OF EXISTING JOBS: 5,280 WAGE: $5,000 $26.4m CLIMATE OF ECONOMIC OPPORTUNITY: $36.4m — 51 — ©2007 ViTAL Economy, Inc. Greater Wabash COI: Opportunities GW 6.03 Economic Picture by Sub-Region • Energy o Become an Alternative Energy Capital of the World o Methane Gas, ethanol and bio-diesel, geo-thermal technologies, green coal concept • KBE o o o o Recertification programs Connect with tourism to improve quality of the industry Continuing education; lawyers, accountants, realtors, etc. Local PC support group • Tourism o o o o o o o Four wheeler activities, racetracks, competitions, training track Hunting facilities and guide services, turkey and deer Lone Ranger Festival, Mt. Carmel Beall Woods, trails, improvement of facilities Underground coal mine park view the fault Underground four wheel tours and adventures Develop a spillway for the Wabash River; 4 ft. — 52 — ©2007 ViTAL Economy, Inc. 6.03 Economic Picture by Sub-Region Greater Wabash: Highlights GW Opportunities GW Challenges • Leverage the community college system for high demand online areas such as nursing • Attractive climate and environment for KBE workers • Utilize the college system to attract young adults to slow the youth brain drain • Unique small town atmosphere near Evansville • Entrepreneurship and business incubation • KBE opportunities from energy knowledge base • Utilization and leveraging of the expanded broadband infrastructure; education, services, connections with external resources and customers • Youth brain drain • Uncomfortable attitude towards change • Bedroom community (for out-of-state employment) and spending) • Consumer spending trend in Indiana • Residential curb appeal – risk of lowering value • Lack of a clear regional differentiation in SI GW Key Trends GW Climate for Growth • • • • • • Unique small town atmosphere; bedroom community • Low cost property values • Export of educational programs • Oil, gas and coal extraction knowledge • Entrepreneurship strategy – business incubation linked with expertise and existing loan funds; GWRPC, SDC, City of Carmi, Wayne City, City of Fairfield • KBE businesses and employment • • • • • Significant youth brain drain Out migration of healthcare services to Indiana Employment opportunities in Indiana Substantial consumer spending in Indiana Expanded economic dependence on Champion Labs and Airtex Strong base of annual community events Large farmers purchasing additional land Limited availability of workforce Growth and improvements in Fairfield East of I-57 & South of Hwy 50 negative growth GW Source: Connect SI COI, RA Interviews and VE — 53 — ©2007 ViTAL Economy, Inc. Economic Profile: Greater Egypt COI 6.03 Economic Picture by Sub-Region SI Number of Jobs by Region Employment by Sector 160,000 Jobs % Average Wage Wholesale & Retail 19,176 14% $28,070 Government 17,306 13% $51,139 Health 15,028 11% $29,363 Manufacturing 12,916 10% $54,310 Education 11,690 9% $28,285 Tourism 11,493 9% $16,332 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 S5 SE GW GE Overview: Labor Participation Rate – 66% Natural Resources 8,635 6% $35,241 GDP: $11.1 billion F.I.R.E. 7,881 6% $59,430 Transport & Utilities 5,615 4% $51,749 Construction 5,468 4% $48,426 KBEs 6,227 5% $57,658 Other 13,250 10% $29,947 Total 134,685 100% $38,703 Top three GDP generators 1. Government – 20% 2. F.I.R.E. – 18% 3. Manufacturing – 11% Highest in SI region Source: BEA Data and RIMS II multipliers — 54 — ©2007 ViTAL Economy, Inc. GE Greater Egypt: Population Trends Prison Population Adjusted 6.03 Economic Picture by Sub-Region 1980 2004 est. Change 2004 est. Adjusted Change Adjusted Franklin 43,393 39,498 (-9.0%) 39,498 (-9.0%) Jackson (P) 61,846 58,186 (-5.9%) 56,031 (-9.4%) Jefferson (P) 36,837 40,323 9.5% 38,463 4.4% Perry 21,794 22,691 4.1% 22,691 4.1% Randolph 35,686 33,242 (-6.8%) 33,242 (-6.8%) Williamson 56,846 63,124 11.0% 63,124 11.0% GE Region 256,402 257,064 0.2% 253,049 (-1.3%) Comparison during same period: USA + 31.1%, Illinois +11.2% Lowest % population loss in SI region from 1980 to 2004 Largest prison population in SI approx. 4,000 Population figures included SIU students = 21,000+ per year — 55 — ©2007 ViTAL Economy, Inc. GE 6.03 Economic Picture by Sub-Region Comparisons with IL Industry Mix: Higher than State Average in Services, Gov’t Jobs Greater Egypt employs more workers than Illinois average in retail trade, lodging accommodation, food services and government jobs GE is below average for KBE related jobs** such as finance, professional and technical even with a major University Percentage of Non-Farm Jobs by Sector IL (%) GE (%) Difference Wholesale Trade 5.1 1.6 -3.5 Retail Trade 12.0 16.6 4.6 Finance and Insurance** 7.0 4.9 -2.1 Professional and Technical** 7.8 2.5 -5.3 Administrative 7.6 4.9 -2.7 Accommodation & food services 7.2 9.8 2.7 Government (includes SIU staff) 14.1 27.5 13.3 % Non-farm employment 60.8 67.8 Source: Bureau of Economic Analysis — 56 — Combined = 1/2 of State average ©2007 ViTAL Economy, Inc. GE SIUC: an Economic Engine in SI 6.03 Economic Picture by Sub-Region 21,598 enrolled in 2006 $13,520/yr per student spent locally Every 100 students generate 18 local jobs Direct economic impact = $284 million R&D Research Spending $150 million R&D parks in the SI region $70 million impact on local economy SIUC is one of the largest employers in Greater Egypt with 5,042 FTE jobs Total Economic Impact ≈ $653 million 5.8% of Greater Egypt’s GDP Source: SIUC Provost & web site — 57 — ©2007 ViTAL Economy, Inc. GE 6.03 Economic Picture by Sub-Region Economic Profile: Greater Egypt COI GE Traditional Business Strengths GE Rising Business Stars • • • • • • • • • • • • • • • • • • Wholesale & retail Healthcare Manufacturing Education Tourism Coal mining Tourism, including ecotourism and vineyards Minor league baseball; Southern Illinois Miners Alternative energy, including ethanol Health services Advanced manufacturing Artisans and arts Warehousing & distribution Marion Regional Airport Wineries Continental Tire Aisin Manufacturing Crownline Boats GE People, Land & Jobs GE Notable • % of IL Land Mass = 5.6% • % of IL Population = 2.0% • % of IL Employment = 1.9% • Southern Illinois University Carbondale R&D knowledge base at SIU • John A. Logan College • Rend Lake College • St. Louis residential impact on Randolph Co. • Highway 13 – I-57 growth corridor • World Shooting Complex • Unique natural features; Lake of Egypt, Crab Orchard Lake, Rend Lake • Winery growth • Energy knowledge base • Pockets of extreme poverty GE Dependencies • • • • Public sector employment Transfer payments SIUC Large manufacturing companies and employment Source: Connect SI COI, RA Interviews and VE — 58 — ©2007 ViTAL Economy, Inc. GE 6.03 Economic Picture by Sub-Region Greater Egypt Region (23 Feb 2007) GE Greater Egypt: Goals 2012 Baseline Same Trend 2012 Goal Change vs. Baseline Change vs. 2012 Same Population (2004) 253,049 258,869 274,432 +8.45% +6.0% Employable Population (16-64) (2000) 164,134 167,909 179,238 +9.2% +6.8% 66.0% 66.0% 71.0% +7.6% +7.6% Employed 2004 All Ages 134,685 140,340 157,787 +17.2% +12.4% Average Wage 2004 $27,830 $35,765 $40,765 +$12,935 +$5,000 $3,748m $5,019m $6,432m +$2,684m +$1,413m Labor Participation (16-64) (2000) Total Region Wages 2004 Determination of specific measurable, wage & employment goals from change in regional wages vs. 2012 trend NEW JOBS:* NEW JOBS AT AVERAGE WAGE:* IMPROVEMENT OF EXISTING JOBS:* 10,468 WAGE: $43,500 $455.4m 6,979 WAGE: $40,765 $284.5m 26,937 WAGE: $5,000 $134.7m CLIMATE OF ECONOMIC OPPORTUNITY: $538.4m * Jobs are the result of action plans related to industry cluster and workforce development strategies. — 59 — ©2007 ViTAL Economy, Inc. Greater Egypt COI: Opportunities 6.03 Economic Picture by Sub-Region Opportunity Securing Foreign Trade Zone for the region Gain more inter-modal facilities and ports Letting Central and Northern IL know that you can ship to many cities to the south from here. Expanding logistics, transportation & storage in the Region Indigenous Resource Leveraged Global/National Trend Location – interstate highway system, rivers Relationship of the Americas to the rest of the world Short sea shipping & river Barge Mississippi and Ohio Rivers Traditional ports (east & west) are too busy Our location Increased emphasis on inland intermodal logistics Mid-America location IL 24, 57 & 64 Our area airports SIU international student body, Tech Center, Community Colleges Bilingual individuals Biomass Crops, Coal, Steam, Research Centers Increasing Freight and Passenger Air Service New transportation systems Diversifying the face of the region Diversity Health Care being tasked with caring for Spanish speaking Increased influx of Hispanics Net Energy Exporter High petroleum prices Source: COI Milestone — 60 — ©2007 ViTAL Economy, Inc. GE 6.03 Economic Picture by Sub-Region Greater Egypt COI: Opportunities Global/National Trend Opportunity Indigenous Resource Leveraged Become a National Leader in Water Recycling Possible water shortages Water Maximize our ability to offer affordable fuel Upward trend of transportation fuel Biomass hydrogen Corn-soybeans-coal water availability? Ethanol-Bio-diesel Need for energy Rend Lake - Tourism Opportunities: Randolph County, Crab Orchard, Linking State Parks (Bike Trails/Repair shops), Road Maintenance, Google: SI Tourism One stop shopping at a central website/the opportunity to find prospects and pay at one site Tourism opportunities: natural resource, regional package,Little Hot Spots/World Shooting Complex/Pyramid State Park (needs promotion) Call Centers Those jobs going overseas People & products competitive wages Tourism Support Booking an entire trip online Extensive tourism destination assets Mentorship: Business owners teaching our young people how to start a successful business Aging of the population Experienced successful retirees Commercialization of Regional Private Research/KBEs Growth of business innovation SIU Incubation (Needs to Cross COI boundaries) Network Action Team that works independently Existing incubators & research parks Source: COI Milestone Growth of global incubation seeking access — 61 — ©2007 ViTAL Economy, Inc. GE 6.03 Economic Picture by Sub-Region Greater Egypt: Highlights GE Opportunities • • • • • • • • • • • GE Challenges Highly educated population Technology transfer from SIUC and SIUE Quality of place and proximity to St. Louis Energy sector: coal, alternative fuels, etc. Foreign student population at SIUC Workforce development resources - Man-Tra-Con SIU & community colleges Price of residential and commercial real estate Transportation Education Center at SIUC 1,000’s of skilled dislocated manufacturing workers Young entrepreneurs and companies/creative class • Culture of Poverty • Comfort with being the dominate economy in SI • Population decline even with a major University • 2,000 recent dislocated workers • Lack of quantity and commitment of leadership • Weak region wide communication • Limited access to public and private capital • Cost of transportation for goods • Anti-business climate • Litigious environment • Bureaucratic mind-set GE Key Trends GE Climate for Growth • • • • • • • • • • • • Rebirth of coal industry • Movement of high net-worth individuals from St. Louis to Randolph County • SIU research and development departments • Knowledge Based Enterprises working closely with SIU research departments • Outdoor recreation activities • Arts and culture linked with wineries • Transportation and logistics hub; air, rail, interstate • Senior living Hwy 13 & I-57 corridor growth SIU Declining Enrollment Medical professional recruitment difficulties Growing population of young professionals Growth and investment in Randolph County Growth of Cedarhurst Center for the Arts in Mt. Vernon Growth of wine industry and winery destinations Turnaround of Continental Tire Growing artisan community including Southern Five Local leadership conducting Energy Symposiums Leadership understanding that GE can benefit from a regional SI economic initiative Source: Connect SI COI, RA Interviews and VE — 62 — ©2007 ViTAL Economy, Inc. GE Regional Economic Summary 6.03 Economic Picture by Sub-Region Greater Egypt (64% GDP and 61% of SI population) dominates the SI region — bodes well for GE, but weak neighbors impact the entire neighborhood SI possesses the economic critical mass ($17.6B GDP) and the population (419,992) to compete with many metro areas and especially globally SIU has a significant direct economic impact on the region ($284 million), but could have a much broader benefit The region has numerous major private sector employers that need to be engaged in Connect SI to support competitiveness; Continental Tire is a example The predominance and burden of government on the regions GDP (20%) needs to be reduced immediately to allow growth to occur including restructuring of tax base SI has a robust inventory of unique natural and knowledge assets that are not being leveraged The region possesses a vast variety of small town amenities and qualities that are in demand by KBE workers that can chose where to live — 63 — ©2007 ViTAL Economy, Inc. Southern Illinois — "Garden of the Gods" This Section provides a condensed overview of the livable community assets, conditions and trends of each of the economic sub-regions of SI. Chapter 6: Regional Perspective 6.04 Livable Community: Assessment — 64 — ©2007 ViTAL Economy, Inc. Livable Community: Introduction 6.04 Livable Community: Assessment In a Knowledge Based Enterprise (KBE) economy livable community elements are valued equally with economic development Development of a Livable Community is the foundation from which successful and sustainable economic growth becomes possible Highly successful regional economies have realized the value of well planned livable community programs in attracting new businesses and workers Highly skilled, mobile and well compensated KBE professionals can chose where to live and work — 65 — ©2007 ViTAL Economy, Inc. Resources Required for a Livable Community (1 of 2) 6.04 Livable Community: Assessment Healthcare — Meet the health and social needs (including physical, mental, spiritual and emotional) of the community citizens Arts/Culture/Heritage — Support for enhanced arts, culture and heritage, assure they will stimulate and support the transition to sustainability in your community Recreation & Leisure Activities — Provide recreation and leisure activities for both residents and visitors. Deliver or exceed expectations while protecting the environment Economic Opportunities — Focus efforts on how your community will create a strong and sustainable local economy, innovative and resilient businesses supported by a strong skilled workforce Energy Resources — Access to low cost, reliable, sustainable energy while managing greenhouse gas emissions and air quality Water Resources — A dependable supply of high quality water in a way that maintains healthy aquatic environments and uses water efficiently Localized Food Systems — Ensure a healthy, nutritious and sustainable food supply that maximizes opportunities to build the social, ecological, cultural and economic capital of the community, “Grow and buy local” campaigns help any community Source: VE Alliance Research — 66 — ©2007 ViTAL Economy, Inc. Resources Required for a Livable Community (2 of 2) 6.04 Livable Community: Assessment Natural Environment — Seek ecosystem integrity and biodiversity will be protected and where possible restored in your community/region Built Environment — Develop and renovate buildings, neighborhoods and facilities that will contribute to making your community unique, livable and sustainable Transportation — Move residents, employees, visitors, and materials to, from and within the community in a more effective & sustainable manner Life-Long Learning — Provide residents of all ages formal and informal lifelong learning opportunities both online and at physical locations Healthy Community — Community culture that places superior value in health and promotes activities that support healthy living Affordability & Housing — Make living and playing in your community affordable for residents, and also meets housing needs of diverse permanent residents Source: VE Alliance Research — 67 — ©2007 ViTAL Economy, Inc. Key Findings of 2004 Illinois Poverty Report 6.04 Livable Community: Assessment 1. Poverty and its impacts are pervasive in Southern Illinois 2. The rural disadvantaged are typically older, less healthy and less active in the work force 3. Gaps in transportation, economic, health, housing infrastructure, and loss of population plague high poverty areas 4. Lack of education attainment in rural areas impedes improvements 5. Earnings of workers in rural areas substantially lag urban areas Source: Key findings of the 2004 Report on Illinois Poverty “An Analysis of Rural Poverty,” Heartland Alliance — 68 — ©2007 ViTAL Economy, Inc. 6.04 Livable Community: Assessment Pervasive Poverty Poverty as a % of Population by SI 30% 25% U.S. Average 12.7% Series1 Illinois Average 10.7% 20% 15% 10% 5% Al ex an de r G al la Ha tin m ilto n Ha rd Ja in ck s Je on ffe rs on Jo hn so n M as sa c Po pe Pu la Ra ski nd ol ph Sa lin e Un io n W h W illi ite am so n Fr an kli n Pe rry W ay Ed ne wa rd s W ab as h 0% Only one SI county (Randolph) has a lower % of poverty than Illinois Source: 2000 US Census — 69 — ©2007 ViTAL Economy, Inc. 6.04 Livable Community: Assessment Pervasive Poverty Impacts the Sense of a Bright Future for the Children in SI Children vs. Adults 65+ in Poverty by SI County Children U.S. Average 17% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Children Adults 65+ G Al ex an de r al la Ha tin m ilto n Ha rd Ja in ck s Je on ffe rs Jo on hn so n M as sa c Po p Pu e la Ra ski nd ol ph Sa lin e Un io n W h W illi ite am so n Fr an kli n Pe rr W y ay Ed ne wa r W ds ab as h Adults 65+ U.S. Average 9.6% Children in poverty — twice the rate (22%) than that of Adults 65+ in SI (11%) Source: 2000 US Census — 70 — ©2007 ViTAL Economy, Inc. 6.04 Livable Community: Assessment High Poverty Rates Impact Many Quality of Life Elements in SI Highest % in rural region Highest poverty rate Highest unemployment rate since 09/03 #1 #1 #1 Highest % of population over age 65 Highest % age 65+ in poverty Highest % age 65+ with a disability Lowest % of population 0-10 Highest % age 0-17 in poverty #1 #1 #1 #1 #1 #4 Highest % households lack complete plumbing Highest % households lacking complete kitchen Highest % commuting to work from other IL counties Lowest % population work and live in same county Highest % households rent burdened Highest % of Adults with no High School Diploma #1 #1 #1 #3 #3 #1 Lowest % college graduates Highest % enrolled in Medicaid Highest % age 5+ with a disability #1 #1 #1 Highest % households owner burdened Source: IL Poverty Summit, “2004 Report on Illinois Poverty,” Based on U.S. 2000 Census or IL Dept of Employment Security data & Atlas of Illinois Poverty Spring 2003 — 71 — ©2007 ViTAL Economy, Inc. 6.04 Livable Community: Assessment Low Educational Achievement Impacts Other Economic and Community Factors; Healthcare, Social Services, & Poverty SI Population % 25+ without High School Diploma 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Illinois SI Poverty Al ex an d Ga er ll Ha atin mi lt o Ha n r Ja din ck Je so n ffe r Jo son hn s M on as sa c Po Pu pe l Ra ask nd i olp Sa h lin e Un ion W W illi h ite am s Fr o n an kli n Pe r W ry ay Ed ne wa W rds ab as h Average 11.1% Only two SI Counties (Jackson & Wabash) have a better than State of Illinois average of citizens without a high school diploma Source: 2000 US Census — 72 — ©2007 ViTAL Economy, Inc. Youth at Risk & Youth Perceptions 6.04 Livable Community: Assessment Southern Illinois has mixed youth risk factors: SI counties have higher child abuse/neglect rates and higher divorce rates than Illinois average Lower high school drop out rates and higher standard test scores than rest of Illinois Other risk factors are comparable to State averages Source: IL Criminal Justice Information Authority Local High School Students: “We want to stay in region, but see no good job opportunities” “Fear of being stuck here” — the female students defined: “getting stuck means getting pregnant” Source: RA and EF Hutton Interviews conducted by VE Team — 73 — ©2007 ViTAL Economy, Inc. 6.04 Livable Community: Assessment Youth: the Key to SI’s future Young people are being told that working with your hands is a dead end — as a result there are very few skilled trades people available Schools are outdated in their physical infrastructure and curriculum The SI entrepreneur group recognized and agreed that a top priority in the region was to implement a youth entrepreneur program From SI’s youth themselves: Why should we kids care, when adults don’t enforce the rules to keep our community safe, attractive and vibrant Most of us are leaving — no apparent job or career opportunities — most needed to work while in school and coveted a job at McDonalds! We want to stay but can’t; this realization saddens us because the area is beautiful and would be a very nice area to live in This area is viewed as “dead!” Source: RA and EF Hutton Interviews conducted by VE Team — 74 — ©2007 ViTAL Economy, Inc. Affordable Housing With a Hidden Story 6.04 Livable Community: Assessment SI Advantages Home ownership in Southern Illinois is higher than in Illinois Overall, housing costs are low SI Challenges Much of housing stock is aging and small Financing can be difficult since cost of construction is higher than final appraised value Southern Illinois vs. Illinois: More people own homes, fewer rent 80% 60% IL 40% SI 20% 0% Owners Renters Despite low housing costs, over 21% of households pay more than 30% of income for housing Source: HUD Comprehensive Housing Affordability Strategy (CHAS) Data 2000 — 75 — ©2007 ViTAL Economy, Inc. Bankruptcy Rates 6.04 Livable Community: Assessment State Bankruptcy Rates, June 2005-06 Illinois Low business bankruptcies High personal bankruptcies IL and the surrounding Midwest states among the worst in U.S. for personal bankruptcy Southern Illinois Non-Business Per Business State Rank Per Person Sate Rank Illinois 0.29% 14 0.59% 36 Indiana 0.46% 35 0.95% 50 Kentucky 0.38% 23 0.71% 44 Missouri 0.25% 9 0.66% 42 Note: Rank of 1 is lowest rate, rank of 50 is highest rate Lowest business bankruptcies in Illinois Business IL Bankruptcies by District, June 2005-06 If the region was a state, it would rank # 2 in the U.S. Business Non-Business Highest personal bankruptcies in the state Northern 0.29% 0.56% Central 0.34% 0.67% If the region was a state, it would rank # 45 in the U.S. Southern 0.16% 0.73% Note: Southern District covers the 38 southernmost counties in IL Source: U.S. Bankruptcy Courts — 76 — ©2007 ViTAL Economy, Inc. Lower Crime Rates 6.04 Livable Community: Assessment 2005 Crime: Number of Offenses Per 100,000 4,000 3,500 3,000 IL 2,500 2,000 SI 1,500 1,000 500 ur gl ar ul M y t/ ot B o C at rV ri m te eh ry in ic al l e Se Th xu ef al t A ss au lt R ob be ry A Source: Illinois State Police gr vt . A ss a B Th ef t To t al 0 SI has 14% lower rate than Illinois for total crime index offenses 19% lower rate for general thefts – the most frequent Motor vehicle thefts, robberies, murders also lower in SI than Illinois SI has higher rate of burglaries and assaults, and sexual assaults Meth labs in Southern Illinois remain a crisis — labs operate across the region and users are more common in rural than urban areas Source: Shane Koch et al, “Southern Illinois Methamphetamine…,” 2007. — 77 — ©2007 ViTAL Economy, Inc. SI Environment Highlights 6.04 Livable Community: Assessment Southern Illinois maintains a generally healthy eco-environment Water quality and quantity is high (state management is higher than neighboring states) Open pit mine areas need remediation Numerous vacant abandoned industrial & manufacturing sites now are brownfields requiring clean-up Mild climate year round Long growing season Useable waterways and many spring fed lakes Natural forests aplenty Ancient history untapped archeology throughout SI Source: EPA; VE Research & Analysis — 78 — ©2007 ViTAL Economy, Inc. SI’s Rich Cultural Assets: Just a Short List 6.04 Livable Community: Assessment A Range of Museums Offerings Cobden Museum (Cobden) Custom House Museum (Cairo) Elijah P. Curtis Home/ Museum (Metropolis) General John A. Logan Museum (Murphysboro) Edwards County Historical Society Museum (Albion) L. Haas Store Museum, Matsel Cabin Museum, Sen. Robinson Stewart House (Carmi) Ratcliff Inn Museum (Carmi) Superman Museum (Metropolis) Flourspar Museum Johnson County Courthouse Jefferson County Historical Village (Mt. Vernon) An Astounding Variety of Annual Festivals & Events Big Muddy Film Festival Shrimp Festival Superman Festival The Archery Shooters Association Pro-Am Little Wabash River Festival Corn Days in Carmi Wabash Ribberfest BBQ Fort Massac Encampment River to River Relay Southernmost Illinois Birding Fest Multiple wine and food festivals Unique Art Galleries Around the Region Cedarhurst Center for the Arts (Mt. Vernon) Southern Illinois Art & Artisans Center (Whittington) Southern Illinois Art Gallery Associated Artists’ Gallery (Carbondale) Renaissance House: A Working Art Gallery (Eldorado) Shawnee Hill Barn Antiques Fox’s Flea Market Antiques The Art Trail of Southern Illinois 20 Distinctively Unique Galleries within a 70 mile radius Entertainment Abounds! Harrah’s Casino (Metropolis) SIU Salukis college sports teams (Carbondale) Sesser Historic Opera House (Sesser) Marion Cultural & Civic Center Southern Illinois Symphony Orchestra (SIU) World Shooting and Recreational Complex (Sparta) Kornbread Junction Southern Illinois Miners Winery Entertainment — 79 — ©2007 ViTAL Economy, Inc. 6.04 Livable Community: Assessment A Community Development Resource SI can be Proud of Led by Man-Tra-Con, Corporation, Access SI is an online community resource directory designed to support the SI region plus ten additional Southern Illinois counties with a community resource directory Community citizens have online access to a variety of resources including health, social services, education, governmental, cultural, recreation, civic, and workforce employment training and transition Unique Features: Qualities to emulate: • Over 80 service categories are available and searchable on the Internet site • Open access wiki-format that creates efficiency and constant quality improvement • Semi-wiki format: The site allows or individual and organizational updates with content filtering by Man-Tra-Con • Achieves the one-spot access for individuals from anywhere in SI • Allows for volunteers to contact agencies and organizations for support • Creates a collaboration of related services that brings benefit to the citizens of the SI region www.accesssi.org — 80 — ©2007 ViTAL Economy, Inc. Livable Community Assessment: (1 of 2) 6.04 Livable Community: Assessment Criteria Rating Assessment Rationale Healthcare and Social Services • SI has a solid healthcare infrastructure and services in the GE area, but have limited extension into the rest of the region Arts, Culture and Heritage • The region has a robust heritage and history that has not been leveraged. The arts are not well recognized currently, but growing in Recreation & Leisure activities • SI has a strong variety of outdoor recreation venues; indoor leisure activity improvements needed to attract KBE workers Economic Opportunities • SI has limited economic opportunities, but with a commitment to the Connect SI framework a transformation could occur Energy Resources • Access to energy is good with localized electrical generation; cost of electricity has a negative impact on industrial business competitiveness Water Resources • Quantity and quality of water is good for commercial and residential users. Multiple lakes is a recreational asset = Weak to None = Improving = Average — 81 — = Good = Strong ©2007 ViTAL Economy, Inc. Livable Community: Assessment (2 of 2) 6.04 Livable Community: Assessment Criteria Rating Assessment Rationale Natural Environment • The SI regional environment is unique and varied with natural amenities in close proximity to cities and towns Governance • SI governmental structures are in a complicated situation; there is a much larger than average number of entities, most with limited resources and expertise — dramatic restructuring will be difficult to accomplish Transportation • The region has complete package of above average transportation access and infrastructure, including interstate highways, railways, airports and waterways; however, outside of the GE area, public transportation is limited Education and Learning • SI has a strong collection of educational assets that can be utilized to transform the regions workforce to meet global needs Housing • The housing stock overall is aged; current economic climate hinders the development of new housing stock due to cost of construction versus market value; and lack of building standards results in reduced predictability Localized Food Systems • The region has tremendous potential to build local food systems with vast agriculture knowledge, research facilities, optimum climate — strategies need to be employed to expand farmers markets and farm to table initiatives — 82 — ©2007 ViTAL Economy, Inc. Livable Community: Summary 6.04 Livable Community: Assessment SI sits in one of the most desirable and livable natural environments in the mid-west, though lags in meeting 21st Century livable community amenities, infrastructure and expectations Most communities do not have building or zoning standards Many communities do not have 911 emergency communications systems and in have recently voted them down Access to basic healthcare services in many cities and towns outside of the GE region are limited SI has a low curb appeal that hinders its ability to attract KBE businesses and workers SI has developed a vast amount of community and social service agency knowledge base that can be leveraged for greater benefit for the region — 83 — ©2007 ViTAL Economy, Inc. Southern Illinois — "Garden of the Gods" Infrastructure is a key element of community development, which includes both above and below ground components. Infrastructure assets support safe and livable communities. Chapter 6: Regional Perspective 6.05 Infrastructure: Assessment — 84 — ©2007 ViTAL Economy, Inc. 6.05 Infrastructure: Assessment U.S. Infrastructure Is Failing 2005 Report Card for America’s Infrastructure American Society of Civil Engineers (ASCE) created an Infrastructure Report Card U.S. infrastructure is failing The ASCE gives a “D-” grade to America’s infrastructure Total U.S. infrastructure needs $1.6 trillion over 5 years Source: Report Card For America’s Infrastructure 2005, American Society of Civil Engineers and Infrastructure 2007: A Global Perspective, Ernst & Young — 85 — Aviation D+ Bridges C Drinking Water D- Energy D Navigable Waterways D- Public Parks & Recreation C- Roads D Solid Waste C+ Transit D+ Wastewater D- ©2007 ViTAL Economy, Inc. 6.05 Infrastructure: Assessment Illinois ASCE Report Card 39% of major roads are in poor or mediocre condition Motorists spend $2.2 billion a year in extra vehicle repairs; roughly $271 per motorist 17% of bridges are structurally deficient or functionally obsolete 31 state-determined deficient dams 176 high-hazard dams Dam rehab costs estimated at $171.3 million Drinking water infrastructure needs $6.15 billion over next 20 years $11.89 billion in wastewater infrastructure needs Top three infrastructure concerns in Illinois: — roads, bridges, wastewater — Source: Report Card For America’s Infrastructure 2005, American Society of Civil Engineers and Infrastructure 2007: A Global Perspective, Ernst & Young — 86 — ©2007 ViTAL Economy, Inc. Applying the Report Card to SI 6.05 Infrastructure: Assessment If SI’s infrastructure is proportional to Illinois ASCE Report Card: Roads: Poor conditions cost $40.7 million per year in lost time, additional fuel consumption, and vehicle repairs Bridges: Approximately 20% of bridges are deficient Water Systems: SI drinking water infrastructure requires $130 million over five years Wastewater: $260 million repairs in wastewater infrastructure are needed Assumptions: 75% of area residents are motorists. Infrastructure requirements allocated as proportion of total population Given the relatively small population in SI and limited political clout historically in Springfield and Washington, SI’s infrastructure may be in greater disrepair Source: Report Card For America’s Infrastructure 2005, InterVISTAS Development Economics 2007 — 87 — ©2007 ViTAL Economy, Inc. SI Infrastructure: Summary 6.05 Infrastructure: Assessment Nine primary water producing Water Districts serve SI SI water supply is in good shape with excess capacity in most systems Most sewer systems were built during the “coal age”; well built then, but many don’t meet current design criteria — 30-40 year old systems need repair USDA & IL-EPA have funded rebuilding a number of systems serving 200-300 person communities Most systems can absorb additional population of 20-30% and small business growth of 20-30 persons per location — out-migration left excess capacity Any major industrial expansion will require additional capacity and existing sewer system upgrades Road systems are maintained by either township road districts, county, state or federal governments — annual maintenance of township roads take a backseat to capital improvements USDA has invested heavily in repaving & upgrading road systems in SI — while many roads have been improved, a lot more needs to be done Energy supply is reliable with a choice of providers throughout SI Source: USDA Rural Development Regional Water Systems & Community and Business Program Analysis, GE, SE, S5 & GW CEDS — 88 — ©2007 ViTAL Economy, Inc. Southern Illinois — "Garden of the Gods" Chapter 6.06 provides a review and assessment of the health of SI citizens, access and conditions within the healthcare industry, and the work of the Connect SI Healthcare COI. This Section recognizes the enormous amount of investment and effort already done by the healthcare industry in addressing major fundamental challenges. Chapter 6: Regional Perspective 6.06 Healthcare: Assessment — 89 — ©2007 ViTAL Economy, Inc. Healthcare Assessment: Intro 6.06 Healthcare: Assessment Good physical and emotional health of the region’s workforce is required to build and sustain a vibrant economy Healthcare is often viewed as a social service, however, it is an important industry that often supports the economic well being of a region through high paying, high skill level jobs Access to high quality healthcare services is a predominate decision factor for KBE companies and also for workers when deciding were to live. Healthcare will continue to be a growth industry as the healthcare needs of 77 million aging boomers increases Many rural regions are challenged more than urban centers with rising age of residents, diminished resources for care, and declining infrastructure. Rural regions with high levels of poverty result in elevated demand for mental health providers and services The CSI Healthcare COI has focused on five measurable improvement targets; Improved health outcomes Provider profitability Regional skills shortage Connectivity — 90 — ©2007 ViTAL Economy, Inc. SI Healthcare is Big Business 6.06 Healthcare: Assessment Healthcare Jobs % of Healthcare Jobs of Subregional Economy Total Wages % of Healthcare Wages of Subregional Economy % of Total SI Healthcare Economy GDP Southern Illinois 22,210 11% $652M 8% 100% GE 15,028 11% $441M 8% 67.6% SE 2,264 10% $66.4M 8% 10.2% S5 2,541 10% $74.6M 8% 11.4% GW 2,377 9% $69.0M 6% 10.7% • National employment in healthcare and social services averages 10.9% • In SI, $93,000 of healthcare spending creates one local healthcare job • Healthcare industry is the third highest employer in the SI region • SI Healthcare has a 1.5 economic multiplier on wages • 49% of healthcare employment is Registered Nurses, Licensed Practical Nurses and Nursing Aides and Attendants • Over 50% of these jobs have a higher wage than the SI average wage Source: Connect SI Health Scenario — 91 — ©2007 ViTAL Economy, Inc. Healthcare Is Very Complex: SI Is Missing Many Industry Components 6.06 Healthcare: Assessment Payers Fiscal Intermediaries Providers (SI Focus) Purchasers Producers • Government • Insurers Hospitals • Wholesalers • Drug Mfrs • Employers • HMOs Physicians • Device Mfrs • Individuals • Pharmacy Benefit Managers Pharmacies • Mail Order Distributors • Employer Coalitions Public Health Districts • Medicaid • Medicare • NGOs IDNs** Pharmacies Alternate Site Facilities • Group Purchasing Organizations • Medical Surgical Manufacturers • Health Information System Firms Community Health Sites In order for SI to achieve the goals set by the Healthcare COI, many more organizations along the Healthcare Value Chain need to be brought to the table Source: Wharton School Study of Healthcare Value Chain - Commissioned by The Center for Healthcare Management Research * IDN= Integrated Delivery Networks — 92 — ©2007 ViTAL Economy, Inc. Out-migration of Healthcare Services Are an Economic Opportunity for SI 6.06 Healthcare: Assessment SI Regional Healthcare Services Leakage Regional Hospitals Admissions Patient Days Charges GE 16.5% 23.2% 26.2% SE 23.3% 31.9% 42.8% S5 49.0% 58.9% 62.7% GW 45.2% 50.8% 62.1% Total SI Leakage 25.5% 33.1% 37.2% Causes of Out-Migration The total value of healthcare charges being paid outside of SI region =$1.06 billion • Misconceptions re type and quality of healthcare services offered in SI • Missouri Hospitals – 19.8% • Population chooses Indiana over GE healthcare facilities • Indiana Hospitals – 8.1% • Follow-ups are also done outside SI — a “ripple effect” • Kentucky Hospitals – 7.4% • A perception that bigger hospital provides better service • St. Johns Hospitals – 1.4% • Referrals by SI physicians to hospitals outside the area to protect their business clientele • Memorial Springfield - .6% Source: Connect SI Health Scenario, CSI Healthcare COI • Lack of certain healthcare specialists in SE, S5 and GW. • Successful marketing strategies by hospitals outside SI — 93 — ©2007 ViTAL Economy, Inc. 6.06 Healthcare: Assessment • Incidence of many serious illnesses resulting in death are much higher in Southern Illinois than in Illinois • Lifestyle & preventative improvements are required to address public health SI Has Higher Incidents of Serious Illness Than Illinois Increased Deaths per 100,000 Population in SI vs. State of Illinois SI IL Higher Rate of Deaths Coronary Heart Disease 215 161 +34% Cerebrovascular Disease (Cancer) 66 51 +29% Lung Cancer 84 53 +58% Colorectal Cancer 29 20 +45% Source: IPLAN Local Hospital Executives: “We have people with worse health and less access to care” Source: RA and EF Hutton Interviews conducted by VE Team — 94 — ©2007 ViTAL Economy, Inc. 6.06 Healthcare: Assessment Heart Disease in SI Primary Cause of Death — 15 of 20 SI Counties Above State Average Illinois 50% Edwards Wabash 45% Wayne Greater Wabash White 40% Randolph Perry 35% Franklin Jackson 30% Greater Egypt Jefferson 25% Willamson Ham ilton 20% Pope Gallatin 15% Hardin Saline 10% Johnson Massac 5% Pulaski Southern Five Union 0% Source: IPLAN Southeastern Alexander — 95 — ©2007 ViTAL Economy, Inc. Coronary Heart Disease in SI 6.06 Healthcare: Assessment Primary Cause of Death — 9 of 20 SI Counties Above State Average Illinois 35% Edwards Wabash Wayne White 30% Randolph Perry Franklin Jackson 25% 20% Greater Egypt Jefferson Willam son Ham ilton 15% Pope Gallatin Hardin Saline 10% Johnson Massac Pulaski Union 5% 0% Source: IPLAN Greater Wabash Southeastern Southern Five Alexander — 96 — ©2007 ViTAL Economy, Inc. Malignant Neoplasms in SI 6.06 Healthcare: Assessment Primary Cause of Death — 5 of 20 SI Counties Above State Average Illinois 30% Edwards Wabash Wayne 25% Greater Wabash White Randolph Perry 20% Franklin Jackson Greater Egypt Jefferson 15% Willam son Ham ilton Pope Gallatin 10% Southeastern Hardin Saline Johnson 5% Massac Pulaski Southern Five Union 0% Alexander Source: IPLAN — 97 — ©2007 ViTAL Economy, Inc. Cerebrovascular Disease in SI 6.06 Healthcare: Assessment Primary Cause of Death — 9 of 12* SI Counties Above State Average Illinois 10% Edwards Wabash 9% Wayne Greater Wabash White 8% Randolph Perry 7% Franklin Jackson 6% Greater Egypt Jefferson 5% Willamson Ham ilton 4% Pope Gallatin 3% Hardin Saline 2% Johnson Massac 1% Pulaski Southern Five Union 0% Source: IPLAN; Southeastern *Note: 8 counties showed “not reported” — 98 — Alexander ©2007 ViTAL Economy, Inc. Lung Cancer in SI 6.06 Healthcare: Assessment Primary Cause of Death — 7 of 16* SI Counties Above State Average Illinois 25% Edwards Wabash Wayne Greater Wabash White 20% Randolph Perry Franklin Jackson 15% Greater Egypt Jefferson Willamson Ham ilton 10% Pope Gallatin Hardin Southeastern Saline 5% Johnson Massac Pulaski Union 0% Source: IPLAN; Southern Five *Note: 4 counties showed “not reported” — 99 — Alexander ©2007 ViTAL Economy, Inc. 6.06 Healthcare: Assessment Poverty Places Pressure on the Healthcare System “People in poverty are less able to access preventative care, have limited opportunity to engage in health promotion activities, and are less likely to be offered health insurance through their jobs. These issues, compounded by rising healthcare costs, leave low-income SI residents struggling to meet their health needs.” ** Individuals Below Poverty Percentage # in SI Southern Illinois 16.4% 71,584 Greater Egypt 15.2% 45,117 Southeastern 16.9% 7,938 Southern Five 18.4% 10,838 Greater Wabash 16.2% 7,691 United States (overall) 12.7% — Illinois 10.7% — Implication: High poverty = High Medicaid Services **Source: “2004 Report on Illinois Poverty,” IL Dept of Employment Security data & Atlas of Illinois Poverty Spring 2003 — 100 — ©2007 ViTAL Economy, Inc. 6.06 Healthcare: Assessment Payor Breakdown Percent SI Has a Higher Amount of Medicare and Medicaid Payments for DRG’s Connect SI Hospitals Missouri Hospitals Indiana Hospitals Kentucky Hospitals St. Johns Hospital Memorial Springfield THIRD PARTY PAYOR 17.2% 2.7% 28.1% 14.9% 10.1% 18.2% MEDICAID 13.7% 11.4% 7.2% 4.1% 9.5% 19.6% MEDICARE 60.2% 44.6% 56.9% 50.3% 62.6% 34.1% OTHER 6.1% 38.3% 2.8% 27.6% 16.5% 13.8% SELF PAY 2.9% 3.0% 5.0% 3.1% 1.2% 14.3% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% TOTAL Connect SI hospitals have a 23% higher rate of Medicare and Medicaid patients than neighboring hospitals Average Per Day Charges Connect SI Hospitals Missouri Hospitals Indiana Hospitals Kentucky Hospitals St. Johns Hospital Memorial Springfield THIRD PARTY PAYOR $4,514 $8,937 $4,507 $4,761 $6,973 $5,628 MEDICAID $3,122 $2,424 $2,741 $2,940 $4,903 $2,863 MEDICARE $3,454 $4,326 $4,328 $4,275 $7,864 $6,561 OTHER $3,721 $4,566 $2,257 $5,233 $7,366 $6,794 SELF PAY $3,458 $4,801 $5,723 $3,179 $4,922 $5,805 TOTAL $3,562 $4,112 $4,143 $4,436 $7,222 $5,059 • Medicare and Medicaid payments in SI are 25% less than commercial private payor • Medicare and Medicaid payments in SI are 25% less than neighboring hospitals • Connect SI hospitals only receive 71% reimbursement levels of what other neighboring hospitals receive for medical services Note: slide data has been averaged and may not be precisely accurate; DRG – Diagnosis Related Group Source: Connect SI Healthcare COI — 101 — ©2007 ViTAL Economy, Inc. Changing the Private Insurance Proportion in Payer Mix 6.06 Healthcare: Assessment 2004 HOSPITAL VISITS % of VISITS GOAL Third Party Payer 10,674 16.2% + 5% to 21.2% Medicaid 11,856 18.0% - 5% to 13.0% Medicare 32,639 49.6% 49.6% Other 8,232 12.5% 12.5% Self Pay 2,409 3.7% 3.7% TOTALS 65,810 100.0% 100.0% Proposed 5% Swap: Increase commercial clients +5%, Reduce Medicaid clients -5%, • 72% of SI healthcare payments are Medicare and Medicaid in SI • Medicare and Medicaid reimburse medical providers 7% less than third party payers • Co-pay insurance has increased 11-to-14% in the last five years in Illinois • Nationally, 24.4% of medical services are not paid for by the patient Achievement of CSI economic growth goals will expand 3rd party revenues, increase access to healthcare, and reduce the n umber of patients/families using Medicare, and dramatically reduce the percent of uncompensated & under-compensated medical services Source: CompData, Connect SI Healthcare COI, Illinois Medical Insurance Underwriters, 2005 — 102 — ©2007 ViTAL Economy, Inc. 6.06 Healthcare: Assessment Mental Health Issues and Challenges Are Greater in a Region With High Poverty Child & adolescent psychiatric services are generally limited in SI Lack of transportation has been determined as the #1 issue facing patient access, resulting in missed appointments Services for the underserved and low income are lacking and typically individuals are placed on waiting lists — while waiting many decided not to engage services SI has a strong perceived stigma of seeking mental health services that creates a barrier to entry ‘Depth-of-enterprise’ limits the ability for patients continued counseling in SI “Getting children out of poverty can improve their mental health, but does not fix everything — improvements were seen in behavioral problems, but depression and anxiety remained largely unchanged” - Journal of the American Medical Association; Duke University 7-yr Study Rural North Carolina, 2006 Source: RA Interviews, Rural Health Association, Illinois Delta Network Summary — 103 — ©2007 ViTAL Economy, Inc. 6.06 Healthcare: Assessment Complications Within the Healthcare Industry Impact Cost, Profitability and Quality of Care • Bad debt and uninsured patients – bills for service that cannot be collected • High level of publicly insured patients: Medicare and Medicaid • Level of publicly-insured patients likely to rise due to ‘Illinois Covered’ • Rising costs from the delayed and declining reimbursements • Limited physician control and professional assessments when referring • Account receivables over 90 days are approximately 25% of billings causing excessive burden on operational cash flows • Abuse and fraud within the entire system for Medicaid and Medicare • Diminishing physician access for Medicaid patients is compounded by limited transportation to other counties or states • Lack of skilled workforce especially in nurses with college degrees Source: Blue Cross-Blue Shield of Illinois 2004 Study — 104 — ©2007 ViTAL Economy, Inc. 6.06 Healthcare: Assessment Projected Health Skills Shortages Will Challenge Connect SI Goals The U.S. is facing a health skills shortage and so is SI The Connect SI Healthcare Community of Interest (COI) identified projected needs in many job types Potential opportunity The table below reflects projected job needs in the region – a 47% increase in key health personnel Potential Opportunity Projected Health Skills Needs of Select Occupations for SI 2004 Employee Levels 8-Year Change Based on COI 2012 Goal % Change Registered Nurses 3,249 1,776 5,025 55% Nursing Aides, Orderlies … 2,210 672 2,882 30% Licensed Practical Nurses 794 272 1,066 34% Medical Assistants 336 240 576 71% Pharmacists 274 192 466 70% Total Jobs 9,976 4,676 14,676 47% Areas of Critical Skill Shortages — 105 — ©2007 ViTAL Economy, Inc. 6.06 Healthcare: Assessment Potential Critical Skills Goal Impact: New Health Positions Total Potential Impact of Critical Skills Goals Jobs Earnings GDP Output Direct SI impacts 4,676 $214,688,000 $260,284,000 $469,836,000 Indirect and induced 2,408 $75,371,000 $156,289,700 $253,371,000 TOTAL 7,084 $282,265,000 $424,506,000 $688,194,000 Indirect Employment: Employment in down-stream industries that result from the presence of a particular business, activity or industry. Indirect employment is generally generated in industries that supply or provide services the direct business, activity or industry. Induced Employment: Employment generated because of expenditures made by individuals employed directly or indirectly by the particular business, activity or industry. SI Healthcare industry has the potential to supply 30% of the Connect SI job goals, but will require tapping existing under-employed and leveraging the regions vast workforce training and education resources Source: Calculated using BEA RIMS II multipliers — 106 — ©2007 ViTAL Economy, Inc. Local Physicians’ Priorities 6.06 Healthcare: Assessment • Expand broadband connectivity for providers & health facilities • Connections needed in short-term between hospitals, outpatient surgical centers, ambulatory care centers and clinics • Connections needed for practitioners at home and at office in near-term • Route 13 physician practices meet with NP COI to advance connectivity across all health centers • Network Provider meetings in COI regions need to include healthcare providers who can identify connectivity gaps & solutions linked to COI broadband rollout • Implement regional secure exchange of healthcare information • Critical and urgent care sites, radiology groups, FQHC’s, labs, hospitals, nursing homes, pharmacies, rehab centers, health departments, free clinics, physicians in the office, at home and on the go throughout SI • Critical need to simplify and improve healthcare system inter-operability for physicians whose patients are served by multiple independent healthcare sites • Improve patient outcomes, safety and convenience, reduce liability and malpractice premiums, increase reimbursement, help physicians be more efficient Source: RA interviews and Healthcare COI — 107 — ©2007 ViTAL Economy, Inc. Healthcare Practitioners’ Suggestions for Change 6.06 Healthcare: Assessment Get doctors to think as a group & establish an identity — we are Southern Illinois, not a suburb of any other region Share our expertise within the region Market within our region and to each other (cross referrals), changing referral patterns Make paperwork easier, more common sense & logical — create a solution that is beyond “individual hospital” mentality Change competition perception to collaboration model. Receiving hospital compliments the referring physician. This relationship builds confidence in patient opinion and within the healthcare system. Compliment rather than tear down Ensure immediate and accurate access to health information Enable new physicians in setting up their practices — e.g., a business incubator or “welcome wagon”. An outside entity is necessary to work within the Stark laws Source: RA interviews and Healthcare COI — 108 — ©2007 ViTAL Economy, Inc. 6.06 Healthcare: Assessment Impact of Addressing Physician Priorities Improving access to medical records Spending more time with the patient by reducing paperwork Providing real-time, continuous loop of patient health information Integrating best practice for the patient, including preventative health for the general population Helping practitioner to do his/her job by providing them information about the cases so better care decisions can be made Reducing medical errors Reducing missed preventative opportunities Reducing unnecessary costs, thereby expediting diagnosis and treatment Working within pay-for-performance initiative Source: Healthcare COI — 109 — ©2007 ViTAL Economy, Inc. 6.06 Healthcare: Assessment Healthcare COI Believes Connectivity Enables Reaching Goals 50 individuals representing 30 different healthcare organizations within the Connect SI region reviewed 14 different connectivity applications Five priority eHealth applications were identified: Electronic master patient index Linking hospitals and physicians with electronic health records Mental health primary consulting Workforce education and training Tracking system for drug seekers Connectivity positively impacts health outcomes and industry profitability — 110 — ©2007 ViTAL Economy, Inc. Healthy Living Strategies: the Key Goal 6.06 Healthcare: Assessment A shift in thinking is required because medical services alone cannot make people healthy Healthy living behaviors are the key to healthy lives, and a healthy economy Healthy People 2010 has identified two key goals Increase the quality and years of healthy life Eliminate health discrepancies Healthier U.S. identified four pillars Be physically active Eat a nutritious diet Get preventive screenings Make healthy choices Medical services alone do not create a healthy community — SI citizens have the personal responsibility for healthy living habits and, therefore, improved health outcomes Source: Health People 2010 — 111 — ©2007 ViTAL Economy, Inc. VE Assessment: Healthcare 6.06 Healthcare: Assessment Criteria Rating Assessment Rationale Retention of medical service revenues • SI has a very high out migration of services to neighboring states, over $1 billion, 37.2% — focus of the Healthcare COI Profitability • Healthcare service provider profitability is under extreme pressure with 72% of patients covered by Medicare and Medicaid Skilled Workforce Availability • The SI healthcare industry is currently challenged with workforce availability and it will become greater in the future Specialist Availability • SI has limited specialty healthcare services outside of the GE region which drives out-migration Access to Patient History • Physicians and medical service providers cannot access patient records easily Mental Health Services • SI has a shortage of mental health services and professionals Healthcare Education & Training • SI has an immediate need for increased healthcare training Cost of healthcare services • The cost-to-value ratio must be competitive with neighbors Improved health incentives • Providers, insurers, employers and regulators need to collaborate to expand preventive programs — 112 — ©2007 ViTAL Economy, Inc. Healthcare COI Outcomes: 2012 Goals 6.06 Healthcare: Assessment The Healthcare Outcomes group identified one key, overarching measure to identify better outcomes through healthy living: Reduce cardiovascular disease mortality from 215 to 166 deaths per 100,000 population by 2012, a 23% reduction — based on the Healthy People 2010 goal — The group identified four strategies to reach this goal and increase healthier living in Southern Illinois; these are: • Increase physical activity levels (exercise) • Improve eating habits • Decrease tobacco use • Increase diabetes management Source: Connect SI Healthcare COI — 113 — ©2007 ViTAL Economy, Inc. 6.06 Healthcare: Assessment Potential Impacts of Connect SI Job Goals: Improved Healthcare Revenue Mix Current State 2004 27,298 New Hi-Wage Jobs 41,461 Existing Jobs >$5,000/Yr Estimated Percentage 60 50 40 30 20 10 0 Note: 60% of the US population had employment-based insurance in 2004 $642 Million New KBE Activity 1,600+ Firms >$2 Billion New Annual Wages +4500 Families with Healthcare Coverage Lift 10,000 Citizens Out Of Poverty $200 Million Information Technology Investment — 114 — Desired Future State 2012 Insured population 10% Medicaid 26% Medicare 18% Uninsured 32% A Far Better Payor-Mix than Today Source: Estimates based on IPLAN, and Census Bureau data ©2007 ViTAL Economy, Inc. Healthcare Summary 6.06 Healthcare: Assessment The SI healthcare industry is big business with even bigger opportunities 11% of SI jobs are in healthcare with an average wage of $36,617 Over 37% of each healthcare expenditure is spent outside the 20 county SI region (over $1 billion) 74% of patient services inside-SI are only being reimbursed at 71% of the outside patient services rates Opportunities: 5% shift in Medicaid to Third Party Payer insurance means +$4.5 million in increased reimbursements, adding 50 healthcare jobs $21.9 million in healthcare services recapture, adding 239 healthcare jobs The overall SI citizens health is lower than Illinois with higher levels of chronic disease Opportunity: Education and healthy living strategies are a key component of a robust economic development strategy — 115 — ©2007 ViTAL Economy, Inc. Southern Illinois — "Garden of the Gods" Chapter 6: Regional Perspective 6.07 Implications & Recommendations — 116 — ©2007 ViTAL Economy, Inc. 6.06 Implications & Recommendations Regional Perspective: Implications SI is below the Illinois average in key community sustaining areas; educational attainment, population health, poverty, and income The below average elements are balanced by: Many positive natural resources of the area Strong education facilities Geographic location Economic size Skilled workforce that have great untapped potential Continued predominance of public sector income dependency stifles entrepreneurship and lowers the chances for growth and economic improvement to occur Unless private sector business development and incomes increase, the tax base to fund infrastructure improvements is hampered If the 20-35 age group continues not to see future opportunity in SI and decide to stay, then economic stagnation will very likely continue Without improved curb appeal, quality housing and sound community infrastructure, attraction and retention of skilled workers is challenged Continued loss of healthcare revenues to surrounding providers, when equal services are available locally, severely limits healthcare expansion Limited entrepreneurial structure and incubation facilities restrains SI’s adaptability to global market opportunities — 117 — ©2007 ViTAL Economy, Inc. Regional Perspective: Recommendations 6.06 Implications & Recommendations Use Connect SI as the vehicle to bring the 20-county region together under a common strategy with critical mass equal to a major metro area Expand healthy living initiatives and preventative programs — Healthy People = Healthy Economy Implement a more robust communication strategy designed to recognize the uniqueness and many positive aspects of SI, share short-term wins — helps reorient thinking & build momentum Focus on private sector business development and income supported by linking entrepreneurship, incubation and finance resources — strengthens the tax base Implement a Youth Engagement Strategy designed to train and retain this key population sector Implement a region-wide Crossing Boundaries Institute to bring together individuals from across the region to focus on a common vision for SI — collaboration needs to be a guiding principle for all aspects of SI life! Develop and form a Livable Community Forum to address key challenges of curb appeal and address other elements contained in the livability index Develop new and innovative financing mechanisms to deal with aging infrastructure Refocus education and training to ensure alignment with new KBE and healthcare workforce demands as well as address skilled labor shortages Expand and continue the great work of the Network Providers and Healthcare COI’s to collectively achieve the goals that will enable overall economic improvement — 118 — ©2007 ViTAL Economy, Inc.