The budget crunch in which Mississippi and all except a few other states find themselves in a recession economy potentially affects virtually everything on which states spend money, including economic development incentives.

In a recent issue of "Area Development" magazine, whose target is professional economic developers and firms looking toward new investment, the outlook for 2009 focused on "greater scrutiny" which will be applied to every project or proposal which seeks incentives or usually automatically would be considered for them.

"Those that survive the review process will face a sharper pencil during negotiations. Even markets with money and the political will to spend it will be very focused on good stewardship of scarce funds," the magazine reported in an article, "The Future of Economic Incentives."

The article also cited the importance of successfully using retention incentives, a category in which Tupelo's Community Development Foundation acted in late 2008 and early 2009 to guarantee viability of Cooper Tire & Rubber, an $85 million payroll of workers from across our region.

Cooper announced in the fall that it would close one of its North American plants, laying out broadly what communities with plants could do to help retain production.

Tupelo's package included long-term financial incentives, including some requiring legislative approval. Those issues were approved, then signed by Gov. Barbour.

The magazine article also cited the importance in lean times of understanding the crucial role of sites, a category in which CDF has been named a Top 10 organization nationwide.

"While outcomes will vary based on geography, project type, and form of incentive, two principles remain as valid as ever: "Good projects will still see active recruitment ... and (i)ncentives do not make a bad location good."

CDF and other development organizations in our region know that a site is among the top factors weighed in any investment decision.

"Companies consider the entire operating picture when making a location decision. Economic incentives are something they consider very late in the location selection process, when they're creating a list of locations that work," the magazine reported.

That analysis is encouraging in the long term for projects like the Toyota plant at Blue Springs, where production has been delayed because of the worldwide decline in auto sales.

The Wellspring site itself at Blue Springs was an economic incentive - surrounded by a concentration of current manufacturing jobs, rail and highway transportation adequacy, regional cooperation, and afterward, the state's $300 million incentives package. All the factors that could be positively controlled were covered, and with economic recovery, everything points toward 2,000 on-site jobs with production.