It wasn’t long ago when Jackson County and its seat, Newport, were plagued with double digit unemployment rates, stagnant wage growth, and few economic opportunities for businesses to grow.
Those trend lines reversed course in 2016, according to the U.S. Department of Labor. Jackson County’s unemployment rate dropped to from 7.5% in January to 5.3% in October. The number of employed workers in the county grew by almost 100 to 5,802, and the number of unemployed workers dropped from 467 to 325, a 30.4% decrease. In 2011, the county’s unemployment rate soared to almost 14% and remained consistently in double digits until two years ago.
Jackson County had 17,333 residents in 2015, a 3.3% drop from 2010, according to the U.S. Census Bureau. About half its residents live in and around Newport. The median household income was $31,261 in 2015.
The turnaround in Jackson County is directly related to the growth of companies in the region, Newport Economic Development Commission Executive Director Jon Chadwell told Talk Business & Politics. Newport also collects a ½-cent economic development sales tax that has helped companies hire workers in the city, he said.
“Our jobs numbers have improved quite a bit in the last several years,” he said. “We have a cohesive leadership team at all levels of government and business in the area. It really helps.”
During the last several years Shearer Foods has expanded its workforce from 145 employees to 485 employees. The company makes corn-based snack chips. It produces the Great Value line for Walmart U.S. stores.
Southwest Steel Processing invested $18 million in its Newport facility during the second half of 2015, and hired an additional 100 workers raising its total employment to 220 workers. The company was formed as a partnership between Arkansas Steel Associates of Newport and Cleveland-based Park Ohio.
The economic development sales tax generates about $750,000 per year. Half the tax is used to help companies and businesses with capital improvements, while the other half can be used to pay operations costs. Companies can petition the commission for a forgivable loan through the program. ASA has taken advantage of the program in the past.
Loans are typically given on a per job basis, and the amount given is based on the jobs the company anticipates it will produce. Companies have job creation targets they must meet to fulfill the loan obligations. If the company meets its jobs quota in five years or less the loan is forgiven, Chadwell said.
There have been times when little or no loans were doled, and the program has more than $2 million in reserves. The amount the commission can give is small in comparison to the expenses many of these companies have when creating a business or industry in the area, Chadwell said. It’s an extra incentive that encourages investment, and research indicates the city receives $38 in private investment for every $1 it issues through the forgivable loan program.
“This is an investment for us. When those workers have jobs they spend money in the community, and it raises our sales tax, property tax, and other tax revenues,” he said.
Newport and Jackson County have other enticements to lure businesses. Industries can dig their own water wells and there is easy access to railroad lines, highways, waterways, and other modes of transportation. The water availability is crucial in food processing, and those types of businesses have done well in Jackson County, he said.
When Chadwell started his job with the commission 11 years ago, about 800 residents left the county each day to work and 700 traveled to the county to work. The same number still leave the county each day to work, but the number traveling to the county has skyrocketed to 2,000.
An impetus has been placed on housing and apartment development to get those people to move into the area. Affordable housing is a serious issue in the area, and it will have to be addressed, he said.
The commission is considering a program to buy houses and lots in dilapidated parts of the city, and offer them to developers. The developers would then only be out the cost of building a house or apartment on the property. It could alleviate the housing problem, it would lessen the risk for investors, and it would broaden the property tax base in Newport. The program is still under consideration.
What’s the key to attracting industries to Newport and Jackson County?
“We’ve got to get them to see themselves here and being successful here,” Chadwell said.