Journal Star, Peoria, Ill., Business File column: Business File

Feb 15, 2010 — Journal Star

Paul Gordon

Feb. 14, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- The Illinois Manufacturing Extension Center is actually able to toot its own horn right now because the 52,000 manufacturing jobs lost in Illinois last year likely would have been worse if not for the work it does.

In the last two years the center, which is based at Bradley University, helped to create or retain more than 2,000 jobs -- at a time many other companies are laying people off or even closing.

Makes one wonder, then, if IMEC will once again this year have to play the funding game, as it seems to almost annually, when state budget talks start.

Gov. Pat Quinn will likely roll out his proposed budget in a few weeks. Chances are it won't include any funding for IMEC.

IMEC was left out of the state budget last year, one among myriad programs cut or severely decreased because of state financing woes. Efforts to get the funding restored before the budget finally was approved fell short.

That cut, coupled with the fact the recession kept many fee-paying IMEC clients from using the program, left the center with a hole this fiscal year, which ends June 30. IMEC works with an average client base of 450 manufacturers each year.

Yet IMEC is getting through the fiscal year on reserve funds its board of directors allocated for operations in case of a funding shortfall, said Tucker Kennedy, IMEC vice president of marketing and public relations. It also reduced its outreach staff by about 15 percent.

IMEC learned that President Obama's proposed federal budget for Fiscal Year 2011 includes $129.7 million for the Manufacturing Extension Partnership. That is the federal funding source for IMEC and organizations similar to it across the country to support outreach and services to manufacturers.

The thing is, the federal government expects state governments to pony up some funding support, as well. If the state gives IMEC $2 million to $3 million, it can get up to $4.5 million from the federal government to help it do its job from 11 offices with 30 employees statewide. IMEC's normal annual budget is about $5 million.

Kennedy said that kind of support for manufacturing extension could "provide manufacturers with the help they need to emerge from the recession in better shape."

Noting that Illinois lost more than 700 companies and 52,000-plus manufacturing jobs, Kennedy said IMEC believes the state must refocus on rebuilding its manufacturing base.

"IMEC and manufacturing extension is a proven vehicle to enable companies to retool, innovate, find new markets and compete," he said.

Kennedy also cited independent research from Regional Economic Models Inc., an independent organization that studies public funding, that says the state's investment in IMEC will return $4 in tax revenue for every dollar it invests. And, he added, "The state needs revenue sources."

Already, the Chicago MEP has lost its federal funding. Kennedy said IMEC wants to try and get the contract for that office to get it operating again. It's needed, he said.

"We are working hard with the legislators and the (Quinn) administration to make the case that investing in

IMEC is a good investment in Illinois and Illinois jobs," Kennedy said.

One thing always important to Illinois politicians is competition with other states, especially for jobs. Kennedy said Indiana is investing in its Manufacturing Extension Partnership program and added that Wisconsin Gov. Jim Doyle has made MEP funding a key component of that state's economic development strategy. Wisconsin's focus on MEP strategy garnered the state a national award recently.

State Sen. David Koehler, D-Peoria, said he and many other legislators from districts that rely on manufacturing are determined IMEC will not be left out of the state budget this year. He said he and State Sen. A.J. Wilhelmi, D-Joliet, who chairs the state's manufacturing caucus, are preparing a bill to that effect.

"The IMEC program is far too important of a program to the state to not get the funding it needs to do its job the best it can," Koehler said.

Quinn is known to be a supporter of IMEC, at least in the past. Yet Koehler said he's skeptical IMEC funding will be in the governor's budget request if only because of election-year politics.

"If there is no tax increase this year, and being an election year I don't see that happening, then we will be right back where we were last year," Koehler said. "That's why a lot of us (in the General Assembly) plan to push forward on this to make sure it gets in this year."

PAUL GORDON is Journal Star business editor. Business File appears here each Sunday. Gordon's e-mail address is pgordon@pjstar.com.

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